Harvard Business Review – February 2019
Advances in artificial intelligence (AI) software and hardware are giving rise to a multitude of smart devices that can recognize and react to sights, sounds, and other patterns—and do not require a persistent connection to the cloud. These smart devices, from robots to cameras to medical devices, could well unlock greater efficiency and effectiveness at organizations that adopt them.
But that’s only part of the story. In some industries, smart machines may well help expand existing markets, threaten incumbents, and shift the way revenue and profits are apportioned among industry players.
Rapid strides in technology and the growing investment in AI innovation signal how fast AI deployment is moving. Advances in software and hardware are propelling AI outside of the data center into devices and machines we use in our work and our everyday lives.
Processors designed to execute machine learning algorithms efficiently while using minimal power—essential for use in mobile devices—are already coming to market. For instance, MIT researchers recently unveiled a chip that can perform inference using neural network computations three to seven times faster than previous chips, and with up to 95 percent less power consumption.
And dozens of companies working on new generations of AI chips—for use both in and outside of data centers—are attracting significant investment. These companies raised more than $1.5 billion in funding last year, nearly twice the amount they raised the year before.
Deloitte predicts there will be more than half a billion mobile chips running machine learning on smartphones, tablets, and other devices in 2019. And continued innovation in AI hardware and software will lead to a growing number of devices and machines with built-in AI capabilities.
All this is to say that AI is not just getting better—it is becoming more pervasive. As new generations of hardware and software endow all manner of both consumer and enterprise devices, appliances, machines, and other equipment with AI capabilities, we are poised to enter an era of pervasive intelligence.
This era of pervasive intelligence will be marked by a proliferation of AI-powered smart devices able to recognize and react to sights, sounds, and other patterns. Increasingly, machines will learn from experiences, adapt to changing situations, and predict outcomes. Some will infer users’ needs and desires and even collaborate with other devices by exchanging information, distributing tasks, and coordinating their actions.
With AI embedded, rather than confined solely to the cloud, the intelligence in these devices will not depend on internet connectivity. And they will not suffer the latency entailed by transmitting data to the cloud for analysis. Lower latency and connectivity independence will enable all kinds of applications—such as vehicle navigation and some health care applications—that require instantaneous response and robust performance even when connectivity is poor.
A wide range of industries will likely benefit. For instance, in manufacturing, robots are increasingly being equipped with sensors and AI, boosting their utility on the factory floor by allowing them to work safely alongside humans. Early iterations of this new generation of collaborative robots, or cobots, relied primarily on cloud-hosted intelligence, but chip makers and robotics companies are partnering to embed intelligence in computing resources on the factory floor or in robots themselves. This could allow robots on the assembly line to calculate over a thousand times faster or respond immediately to disruptive events.
In health care, intelligent medical devices with embedded AI could change how health care is delivered and promise to cut costs and enhance patient well-being. Trials have shown, for instance, that AI-powered implants for epilepsy patients significantly reduced the frequency of seizures. Similar implants that can sense and avert impending negative health events could deliver remote monitoring and treatments, along with cost savings in patient care.
At construction sites, real-time monitoring of progress with drones and smart cameras could prevent project delays and cut material waste, estimated at U.S. $160 billion annually. One startup that makes AI-powered autonomous construction-site inspection vehicles claims that its system improved productivity by 38 percent and helped a project come in 11 percent under budget.
And autonomous vehicles, perhaps the most prominent example of machines with embedded intelligence, are expected to reshape the transportation sector by offering a cheaper alternative to traditional car ownership through on-demand ride services. They could also make parking lots, traffic jams, and gas stations disappear, while upending traditional business models for auto insurers, logistics providers, and other companies.
Smart devices have the potential to help companies achieve new levels of efficiency and effectiveness. But the impact of the age of pervasive intelligence goes beyond faster, better, and cheaper. The possibilities include:
Expanding markets: By cutting costs and increasing efficiency, smart machines may help expand certain markets. The adoption of the warehouse picking robots, for instance, could help expand the online grocery market. Faster order fulfillment and delivery can help reduce the wait times that some cite as a top reason why consumers don’t buy groceries online. In the energy field, where smart wind turbines that work collaboratively have helped operators to cut costs and increase output, demand for wind energy has increased because it is price-competitive with more traditional energy sources.
Shifting revenues: Smart devices could lead to shifts in how revenue and profits are apportioned among industry players. Many industry experts expect that the advent of autonomous ride-hailing services will drive down vehicle ownership, shifting revenue from car makers to autonomous fleet operators. Other industries could see similar transformational shifts driven by the speed and efficiency of intelligent machines. Health care providers could see similar value shifts caused by AI-equipped medical devices. Health care spending could shift from emergency-room visits to devices and implant procedures, with technology potentially saving patients thousands of dollars in annual emergency care costs.
The era of pervasive intelligence will present professionals in a variety of roles with opportunities and challenges. Operations professionals for instance may need to consider how to select, integrate, and employ smart products to gain greater speed and efficiency for their organizations. Product marketers may need to plan new generations of products with embedded intelligence. And market strategists will need to understand how intelligent devices could change the dynamics in their industry.
It will be several years before the pervasive intelligence trend has a significant impact on most industries, but devices with embedded intelligence will eventually become ubiquitous in commercial settings and consumers’ lives, enabling entirely new levels of performance and efficiency. Companies should begin now to game out the potential impact of pervasive intelligence on their business and their industry to position themselves to reap the benefits.