Silicon Valley Thought Leaders Series

Artificial Intelligence and the Future: Promise or Peril? 2 June 2016 @MarkHolmanATK #SVThoughtLeaders

What will the future of Artificial Intelligence hold ? Promise

or

“In the future, every decision that mankind makes is going to be informed by a cognitive system, and our lives will be better for it” – Ginni Rometty “AI can help us in everything challenges like climate change and cancer diagnosis”

– Sundar Pichai “There’s nothing to fear from AI…Instead, we should hope for the amazing amount of good it will do in the world” – Mark Zuckerberg

Peril “I don’t understand why some people are not concerned” – Bill Gates “With artificial intelligence we’re summoning the demon…[it] could be our greatest existential threat” – Elon Musk

“Success in creating AI would be the biggest event in human history… Unfortunately, it might also be the last” – Stephen Hawking

We polled executives on their view of AI’s progression – most are truly optimistic Promise or Peril?

Who will be first to develop Human Level Intelligence? 32%

70%

Where do you expect the most significant impact? 33%

31%

19%

31%

18%

18%

18%

Finance & Banking

Manufacturing

19%

11%

Promise

Peril

Not Sure

Source: A.T. Kearney surveys, (N=80, N=434, N=244)

Military / Government

Start-up

Large Academia Corporation

High tech, Healthcare & Telcom, Media Medicine

Massive AI investment is bringing new capabilities Over 177 deals in the last five years

Over $70B in global investment in AI

Leaders acquiring AI firms M&A

4

Private Investment

2 1 2 2010 2011 2012 2013 2014 2015

2012

2013

2014

2015

2016

2

6 3 15

10

13

9

5

2010 2011 2012 2013 2014 2015

Watson Source: CB Insights, Quid, A.T. Kearney analysis

What is the essence of Artificial Intelligence? Human capability continuum

Machine capability continuum Artificial Intelligence (Learning algorithm, reasoning)

Brain

VS "Intelligence is the ability to learn, understand and make judgements based on reason" (Cambridge Advance Learner’s Dictionary)

Central nervous system

Source: A.T. Kearney, Intel, Singularity University, Kodak, Canon

Human Body

Physical effectiveness

Processing capability (Computing, communication)

(sensory input, robotics)

AI is progressing rapidly – the era of human intelligence is near • Specific/general applications • Supervised and unsupervised learning paradigms • Nature/inspired architecture (e.g. genetic algorithms) • Training by relatively large data sets

Machine Learning

Knowledge-Based Intelligence Early expert system platforms • Specific applications • Pre-programmed and rule based learning paradigm (if-then reasoning) • Limited data Source: A.T. Kearney analysis

“Ava” in ‘ExMachina’

Human Intelligence

Current “Press”

Commercial Offerings 1970’s

• General applications • Autonomous learning • Brain-like architecture & early quantum computing • Self training by big data & M2M collaboration

Deep Blue vs Kasparov

1990’s

2010’s

Future Value 2030’s

2050’s

Machine Intelligence (e.g. deep learning)

Super-Intelligence ‘Transcendence’

Google AlphaGo • Specific/general applications • Supervised and unsupervised learning paradigms • Focus on brain-inspired architecture • Training by big data

• • • •

General applications Autonomous exponential learning Fully Quantum and brain like architecture Self training by big data and AI machine networks

The precise impact of AI is unpredictable, but clearly profound – we forecast 13% of US jobs could be replaced by 2024 Required skill level rating

Learning & Intelligence share of activities Level of AI technology by 2024

+ Analyzed ~800 occupations along 37 activity archetypes

% of Total Job Activities

Low High

Physical Capability Source: U.S. Bureau of Labor and Statistics, A.T. Kearney analysis

13% = or 19M

Highest share of “brain” work activities

Education Level

Learning & Intelligence

High

Low Work Experience

US jobs replaced by AI

The physical and cognitive requirements will drive replacement

Sports Athletes

AI threshold (t)

Annie Leibovitz

Learning & Intelligence

Artists and Animators

Stephen Curry

Janitors

Administrative assistants

Administrative assistant

Janitor

Threshold (t) Physical Capability Note: Activities within occupation are averaged along physical and learning capabilities Source: U.S. Bureau of Labor and Statistics, A.T. Kearney analysis

AI is transforming diverse applications and industries Industry

Today

AI enabled future “Over time, the computer itself - whatever its form factor - will be an intelligent assistant helping you through your day” – Sundar Pichai, CEO Google

Personal Assistants Chat bots

Personal assistant platform

E-commerce platform

• Mobile interactions managed by smart agents

40%

“There will be fewer cars. There will be fewer accidents. And it will be safer” – Tom Wilson, CEO Allstate

Automotive Auto-pilot

Fully autonomous

Transportation platform

• Accidents in the US

-78%

“AI can detect patterns matching a patient’s disease progression and recommend up-todate, cost-effective treatment plans” – Indiana University Research

Healthcare Health tracking tools

Healthcare deeplearning platform

Offerings for specific categories & diseases

• Treatment costs

Source: Transparency market research, Financial Times, The Guardian, Gartner, Indiana University Research, A.T. Kearney analysis

-50%

Beyond technology, what will it take to get AI to mainstream ? Key Questions Ethics

• How will AI know ‘right’ from ‘wrong’? • What rights will AI have?

Regulation

• Who will have ultimate oversight and accountability of AI? • Where is the line drawn for scientific research?

Cybersecurity

• How will we ensure information security with heavy reliance on integrated data? How will our data be protected?

Safety

• How do we ensure the safety of humans in a future that is integrated with autonomous cars, robots, and intelligent personal assistants?

Legal

• Will companies be legally liable for their products? • How will we handle surveillance and our own human rights?

Economic

• In a world of AI, how will the world economy deal with the displaced labor force?

Source: A.T. Kearney analysis, press releases

Current Initiatives

AI should be an essential element of every CEO’s agenda Top of Mind Topics to Consider How will Artificial Intelligence change the competitive dynamics of my industry?

Product & Services Where can we take advantage of AI in our products and services?

How can we use AI to optimize our own internal capabilities and processes?

Operating Model Where should we be investing – market intelligence, R&D and/or external investments – to be prepared for an AI based future? Source: A.T. Kearney

We believe that AI will have more promise than peril Artificial Intelligence will … 1

… Transform companies

2

… Augment jobs

3

… Create new products

4

… Spur innovation

“We have the opportunity to make major strides in addressing the grand challenges of humanity - AI will be the pivotal technology in achieving this progress”

5

… Save lives

– Ray Kurzweil

Source: A.T. Kearney

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