Over the past few decades, artificial intelligence, or AI, has morphed from science fiction into an integral part of 21st century life. And what we’ve seen so far is just the beginning. Experts expect its use to skyrocket in coming years, and market researcher IDC forecasts that by 2020 spending on AI will rise nearly 500 percent to $47 billion from current levels.
As Goldman Sachs (GS) noted in a recent report to clients, AI’s potential appears boundless. IBM’s (IBM) Jeopardy-playing supercomputer Watson may be the technology’s best-known example. Watson has found uses with everybody from doctors treating cancerous brain tumors to retailers trying to streamline their operations. AI can also benefit farmers, financial services firms and energy companies, among others.
Here are six ways this rapid adoption is already transforming business operations throughout Corporate America:
Internet search -- Alphabet’s Google (GOOG) recently noted that it routes a “significant number” of searches through the RankBrain AI system, making it a key variable in how the company’s search algorithm determines its results. According to a 2015 Bloomberg story, if RankBrain sees an unfamiliar word or phrase, it “can make a guess as to what words or phrases might have a similar meaning and filter the result accordingly, making it more effective at handling never-before-seen search queries.”
Recommendations -- Amazon (AMZN), Netflix (NFLX), Spotify and others use AI to determine which products or content a consumer might like based on their past choices, according to Goldman Sachs. Earlier this year, Amazon released its Deep Scalable Sparse Tensor Network Engine (DSSTNE) as open-source software so it could be expanded beyond speech and language recognition and the ability to identify an object’s physical properties. Retailers, which are always looking for an edge in forecasting consumer demands, are working to apply this technology.
Facial recognition -- Google and Facebook (FB) have invested “heavily” in FaceNet and DeepFace, technologies that will identify with near-100 percent accuracy the faces in a user’s photos. Apple (AAPL) recently acquired AI startup Emotient that can read the expressions on the faces of photos to determine their emotional state. “Clearly, these technologies are going far beyond tagging photos,” according to Goldman.
Health care -- AI is proving useful in diagnosing diseases such as cancer, in some cases doing a better job than human doctors. Some startups are also using AI to speed drug discovery by helping better determine which areas of scientific research will bear more fruit. As a result, the risk of expensive Phase 3 trials could be halved, saving billions of dollars.
Agriculture -- According to Goldman, AI has the potential to increase crop yields and decrease irrigation and fertilizer cost. It can also assist in the early detection of crop and livestock disease and lower labor costs associated with sorting crops after they’re harvested. The investment banks estimates that AI-based technologies such as precision fertilizer applications could improve corn yields by 70 percent by 2050.
Financial services -- Money managers could use AI to help make investment decisions and help high-frequency stock traders gain an advantage over their rivals. The technology also could aid in reducing credit risk and compliance costs, which have increased by as much as 50 percent over the past few years.