Tuesday, 29 March 2016

Artificial intelligence comes into focus, but the picture's incomplete

"The Race Is On to Control Artificial Intelligence, and Tech’s Future", announced John Markoff and Steve Lohr last week in the New York Times, here. This absorbing piece explains that "Amazon, Google, IBM and Microsoft, are jockeying to become the go-to company for A.I. In the industry’s lingo, the companies are engaged in a “platform war"", a platform being a piece of software that other companies build on and that consumers cannot do without.  The article continues, in relevant part, interspersed with some comments:
" ... Microsoft dominated personal computers because its Windows software became the center of the consumer software world. Google has come to dominate the Internet through its ubiquitous search bar.

If true believers in A.I. are correct that this long-promised technology is ready for the mainstream, the company that controls A.I. could steer the tech industry for years to come. ...

In this fight — no doubt in its early stages — the big tech companies are engaged in tit-for-tat publicity stunts, circling the same start-ups that could provide the technology pieces they are missing and, perhaps most important, trying to hire the same brains. ...

At the University of Toronto, IBM pursued a start-up called Ross Intelligence that makes a smart legal assistant, and extended a free offer to use its A.I. software, called Watson. For IBM, the financial payoff would come if start-ups like Ross generated sales, followed by a revenue-sharing arrangement [opening up proprietary technology to all users rather than seeking to control it through restrictive licensing is not unknown in standard-seeking sectors. An analogous example is recorded in the 'videotape format war', related at length here] ...

By 2020, the market for machine learning applications will reach $40 billion, IDC, a market research firm, estimates. And 60 percent of those applications, the firm predicts, will run on the platform software of four companies — Amazon, Google, IBM and Microsoft [with no accompanying prediction of interoperability or compatibility, a market of this magnitude may be a magnet for increasingly heavy investment in the 'killer' software that will weaken or eliminate competing technologies]. ...

IBM is making the broadest entry into A.I. Its Watson unit, set up as a separate division in early 2014, is both a software and a services business, with technology tailored to specific industries. More than 80,000 developers have downloaded and tried out the software, and the Watson division has 500 industry partners, including big companies and start-ups [In a developing market where customers need some hand-holding, it makes sense to invest in relationships as well as in products]. ...

In 2015, Amazon and Microsoft both added machine learning capabilities to their cloud software platforms, Amazon Web Services and Microsoft Azure. The companies are using machine learning software to help customers spot patterns and make predictions in vast amounts of data [This could mark a major tipping point in industrial attitudes to "Big Data", as the increasing use of tailored AI demystifies the term, reduces the hype and turns today's novelty into tomorrow's routine]. ...

... To some, the rush to build platforms is taking place long before the technology has matured. ... Some start-ups, like Diffbot in Palo Alto, Calif., are willing to jump into the fray with industry giants under the assumption that there is still plenty to figure out [Jumping in at this stage may look foolhardy, but when so many prospective purchasers of AI products still understand so little about them and are working tolerably well with pre-AI structures, any business that enters the market with a listening ear, a perceptive eye and without the encumbrance of preconceived notions is bound to stand a chance of ,making a mark] ...”
This review is interesting, informative and thoughtful, but regular readers of this weblog may already have guessed what is missing from it.  There's no reference to patenting and intellectual property protection, which not only indicate which bits of AI are legally and commercially ring-fenced but also point to which players (and increasingly which countries) are likely to be controlling the destiny of this sector.  

It's not just ownership of intellectual property that needs a focus.  Its antithesis, competition and antitrust law, may also play a key role.  The moment we read of "a platform being a piece of software that other companies build on and that consumers cannot do without", we might start thinking about "essential facilities doctrine", a legal doctrine of somewhat uncertain application and which ideally prevents a business that controls such a facility from precluding all competition or at least waters its control down to the status of a mere rent-collector on competing businesses' use of its essential facility.  In a market that is predicted to gain a $40 billion price-tag within four years, the cost of a spot of IP analytics is trivial and its potential benefit immense.

2 comments:

  1. Wouldn't all the relevant patents be software ones that are now useless after Alice?

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  2. Reply to Anonymous: the US Sup. Ct. in Alice doesn't impose a blanket ban on software patents. It only blocks patents for abstract ideas implemented on a computer. You can check it out http://www.supremecourt.gov/opinions/13pdf/13-298_7lh8.pdf

    Basically, it brings US law and practice closer to most other countries in the world.

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