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Cloud brings AI capabilities to the masses

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Deloitte says the cloud will help extend artificial intelligence beyond pioneers to the wider enterprise.
Deloitte says the cloud will help extend artificial intelligence beyond pioneers to the wider enterprise.

2019 will see the democratisation of artificial intelligence (AI) as cloud-based artificial intelligence (AI) gives more companies access to cutting-edge tech.

This is according to Deloitte's technology, media and telecommunications (TMT) predictions 2019 report.

"While AI's initial benefits accrued mainly to early adopters with strong IT infrastructures and deep pockets, those early adopters have now rolled out cloud-based AI services that are bringing AI to the masses," according to the report's author Jeff Loucks, executive director of Deloitte's Centre for TMT.

Deloitte Global predicts that in 2019, companies will accelerate their usage of cloud-based AI software and services. Among companies that adopt AI technology, 70% will obtain AI capabilities through cloud-based enterprise software, and 65% will create AI applications using cloud-based development services.

It also predicts that by 2020, penetration rates of enterprise software with integrated AI and cloud-based AI platforms will reach an estimated 87% and 83%, respectively, among companies that use AI software. Cloud will drive more full-scale AI implementations, better return on investment (ROI) from AI, and higher AI spending.

"Importantly, we'll see the democratisation of AI capabilities, and benefits that had heretofore been the preserve only of early adopters," says the report.

"So far, AI's initial benefits have been predominantly accrued by 'tech giants' with extensive financial resources, strong IT infrastructure and highly-specialised human capital," says Paul Lee, head of global TMT research. "However, the cloud will power increased efficiencies and better returns on investment, and we expect these benefits to rapidly extend beyond AI's pioneers to the wider enterprise."

Tech elite

Loucks says AI consists of multiple technologies; at its foundation is machine learning and its more complex offspring, deep learning neural networks. These technologies animate AI applications such as computer vision, natural language processing, and the ability to harness huge troves of data to make accurate predictions and to unearth hidden insights.

He says the recent excitement around AI stems from advances in machine learning and deep-learning neural networks and the myriad ways these technologies can help companies improve their operations, develop new offerings and provide better customer service at a lower cost.

"The trouble with AI, however, is that to date, many companies have lacked the expertise and resources to take full advantage of it. Machine learning and deep learning typically require teams of AI experts, access to large data sets, and specialised infrastructure and processing power.

"Companies that can bring these assets to bear then need to find the right use cases for applying AI, create customised solutions and scale them throughout the company. All of this requires a level of investment and sophistication that takes time to develop, and is out of reach for many."

Deloitte says for this reason, AI initially benefitted pioneers with the required technical expertise, strong IT infrastructure, and deep pockets to acquire scarce and costly data science skills, most notably the global "tech giants". They have the resources to engage in bidding wars for increasingly expensive AI talent.

"They have also invested billions in infrastructure, including massive data centres and specialised processors."

Examples include:

  • How Google has designed its own AI-specific chips to accelerate machine learning in its data centres and on Internet of things devices.The company has been exploring deep learning since the launch of Google Brain in 2011, and uses it extensively for everything from performing video analytics to cooling data centres.
  • Amazon has used machine learning to drive recommendations for many years. The company is using deep learning to redesign business processes and develop new product categories, such as its Alexa virtual assistant.
  • . China's Baidu, Alibaba and Tencent are investing heavily in AI while expanding into areas previously dominated by US companies: chip design, virtual assistants and autonomous vehicles.

From few to many

The tech giants are using AI to create billion-dollar services and transform their operations. Joining them are big enterprise software companies that are integrating AI capabilities into cloud-based enterprise software and bringing them to the mass market.

"A host of start-ups is also sprinting into this market with cloud-based development tools and applications. These start-ups include at least six AI 'unicorns', two of which are based in China. Some of these companies target a specific industry or use case."

The upshot is that these innovators are making it easier for more companies to benefit from AI technology even if they lack top technical talent, access to huge data sets, and their own massive computing power. Through the cloud, they can access services that address these shortfalls, without having to make big upfront investments.

"In short, the cloud is democratising access to AI by giving companies the ability to use it now."

Deloitte recently surveyed 1 900 "cognitive-aware" executives whose companies have begun to use AI for pilots and implementations. It found the most popular path to acquiring AI capabilities is through enterprise software with integrated AI.

Overwhelmingly, this software is cloud-based, either through public or private cloud deployments. Around 58% of the survey respondents globally are using this approach. Deloitte Global estimates that by 2020, about 87% of AI users will get some of their AI capabilities from enterprise software with integrated AI.

This method of adopting AI can have big advantages because companies do not need to develop their own AI applications. AI simply runs in the background, making the software more valuable to the end-user.

The survey of AI early adopters suggests the democratisation of AI is increasing AI usage. According to Amazon, the number of developers using Amazon Web Services for machine learning increased by 250% over the last year.

Across all countries, AI early adopters are also seeing positive financial returns, reporting an average ROI of 16%, Deloitte says.

ROI is helping build momentum for AI, but respondents also believe AI will have major ramifications for their competitiveness in the next two years and are increasing their AI investments. The companies responding to the survey spent an average of $3.9 million on AI in 2017, a level projected to increase to $4.8 million in 2019.

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