Artificial Intelligence’s Winners and Losers -...
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11/8/17, 9(13 AM Artificial Intelligenceʼs Winners and Losers - Barron's Page 1 of 4 http://www.barrons.com/article_email/artificial-intelligences-winners-and-losers-1509761253-lMyQjA1MTE3NjA2NDgwNzQ2Wj WSJ WSJ LIVE MARKETWATCH BARRON'S DJX MORE ASIA EDITION U.S. EDITION Welcome, Rex Customer Center Logout STREETWISE Artificial Intelligence’s Winners and Losers It could hurt tech support and outsourcing specialists, while aiding IBM, Google, Amazon, and Nvidia. November 4, 2017 The board game Go is older and more complex than chess. While it’s been 20 years since IBM ’s Deep Blue beat world chess champion Garry Kasparov, computers only started beating Go experts a few years ago. An Oct. 18 report in the science journal Nature tells us that this particular man/machine contest is done. A system built by the DeepMind unit of Alphabet (ticker: GOOGL) beat Go’s reigning world champ 100 games to none. The deposed champ, you should know, is a prior version of the same artificial intelligence system, which beat one of humankind’s international champions in 2016. The scientific term for this level of A.I. performance is “superhuman.” Go is just a game, but technology watchers feel that a great peak has been scaled, ahead of schedule. After decades of development, A.I.-style computing now works, and its impact will spread far beyond the game board. Computer scientists at DeepMind are turning their “machine learning” technology to serious tasks like drug discovery. From autonomous cars to financial robo-advisors, machine learning is on the verge of improving and disrupting our lives in unexpected ways. Getty Images/iStockphoto Most Popular 7 Value Stocks Primed to Pop 1. Time Warner: What the Stock Says About the AT&T Deal’s Chances 2. Looking for a Google Finance Substitute? Here Are Some Alternatives 3. What’s Behind Another Devastating Day for Blue Apron 4. SEE FULL LIST Latest Market Videos Barron's Bounce: Barbie's Bargain Shares 1 D.Live: Tapping Asia's Tech Boom 2 By BILL ALPERT Email Print 0 Comments Order Reprints HOME MAGAZINE DAILY INVESTING IDEAS ADVISOR CENTER MARKET DATA PENTA BARRON'S NEXT News, Quotes, Companies, Videos SEARCH
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11/8/17, 9(13 AMArtificial Intelligenceʼs Winners and Losers - Barron's
Page 1 of 4http://www.barrons.com/article_email/artificial-intelligences-winners-and-losers-1509761253-lMyQjA1MTE3NjA2NDgwNzQ2Wj
WSJ WSJ LIVE MARKETWATCH BARRON'S DJX MORE
ASIA EDITION
U.S. EDITIONWelcome, Rex Customer Center Logout
STREETWISE
Artificial Intelligence’s Winners and LosersIt could hurt tech support and outsourcing specialists, while aiding IBM, Google, Amazon, and Nvidia.
November 4, 2017
The board game Go is older and more complex than chess. While it’s been 20 yearssince IBM’s Deep Blue beat world chess champion Garry Kasparov, computers onlystarted beating Go experts a few years ago. An Oct. 18 report in the science journalNature tells us that this particular man/machine contest is done.
A system built by the DeepMind unit of Alphabet (ticker: GOOGL) beat Go’s reigningworld champ 100 games to none. The deposed champ, you should know, is a priorversion of the same artificial intelligence system, which beat one of humankind’sinternational champions in 2016. The scientific term for this level of A.I. performance is“superhuman.”
Go is just a game, but technology watchers feel that a great peak has been scaled,ahead of schedule. After decades of development, A.I.-style computing now works, andits impact will spread far beyond the game board. Computer scientists at DeepMind areturning their “machine learning” technology to serious tasks like drug discovery. Fromautonomous cars to financial robo-advisors, machine learning is on the verge ofimproving and disrupting our lives in unexpected ways.
Getty Images/iStockphoto
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Rex Ross
Rex Ross
Rex Ross
11/8/17, 9(13 AMArtificial Intelligenceʼs Winners and Losers - Barron's
Page 2 of 4http://www.barrons.com/article_email/artificial-intelligences-winners-and-losers-1509761253-lMyQjA1MTE3NjA2NDgwNzQ2Wj
This magazine’s readers will, of course, want to foresee A.I.’s winners and losers, whichmay extend far beyond the stock market. A.I. innovations will make roads safer, butthey’ll also displace millions of skilled workers at a faster rate than most people canretrain. New industries will rise, but A.I. could also shred economic safety nets andtrigger social and political crises. Innovation can have a dark side: The DefenseDepartment just demonstrated a swarm of semiautonomous drones.
People, get ready.
“We’ve crossed a critical threshold,” says Ken Sena, a Wells Fargo analyst focused onA.I. Artificial intelligence now has the programming strategies, processor power, andabundant data to transform many industries. Sena got Wells Fargo to build a machinelearning system called Aiera to assist in his equity research.
A superhuman Go program has been one of A.I.’s grand challenges, so DeepMindchose the ancient Chinese game as a test for its “neural network” software, modeled onthe structure of our brains. Earlier versions of the AlphaGo software learned thestrategies through a carefully supervised study of more than 100,000 recorded gamesplayed by human experts. The latest version, AlphaGo Zero, started from a blank slate.With no human guidance or knowledge, beyond the basic rules, AlphaGo Zero played30 million simulated games over 40 days—discovering for itself the strategies learnedby humans over millennia and finding new ones.
This has thrilled computer scientists, because training A.I. systems for any task hasbeen an expensive, time-consuming bottleneck. Systems like AlphaGo may soonexhibit superhuman performance on other tasks, if appropriately well-defined andpredictable. “Machine learning can’t do everything that you and I can do,” says Sena. “Itcan do some things better and some things worse.”
The rise of these machines will lift demand for certain computer components. Just theone AlphaGo Zero system required about $25 million in hardware, including customA.I.-processing chips designed by Google. A lot of popular software for machinelearning runs on Nvidia (NVDA) processors, and all these systems require stacks of fastmemory chips, made by the likes of Micron Technology (MU). The media usuallydepicts A.I. as blue-collar robots that build cars or clean homes, but the white-collarwork done by machine learning systems will occur invisibly across the internet, boostingdemand for network switches and cloud data centers.
SENA SAYS THE BIGGEST BENEFICIARIES will be the firms pioneering thetechnology. Machine learning already powers the search suggestions of Google andMicrosoft (MSFT), chatbots like Amazon.com’s (AMZN) Alexa, and therecommendations at Facebook (FB), and Netflix (NFLX). That’s why Sena rates allthese stocks Outperform. China’s vast size inspires him to similar expectations forAlibaba Group Holding (BABA), Baidu (BIDU), JD.com (JD), and Tencent Holdings(700.Hong Kong). In the next decade, A.I. revenue could equal today’s entire U.S.economy, he contends.
At service firms, such as Wall Street banks, smart, self-training systems could reduceoperating costs—in large part by eliminating high-paid workers. Technologicalunemployment has been a worry since the start of the Industrial Revolution. Millions ofwhite-collar professionals could find themselves racing—like the steel-drivin’ man JohnHenry—against the A.I. steam hammer.
Oxford University researchers caused a fright in 2013, when they estimated that 47% ofall jobs could be taken over by artificial intelligence automation. A 2016 report by theOrganization for Economic Cooperation and Development put the number at 9%. Buteven that net loss would severely strain a country like the U.S., where half the workersget their health insurance from their employers.
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Rex Ross
Rex Ross
11/8/17, 9(13 AMArtificial Intelligenceʼs Winners and Losers - Barron's
Page 3 of 4http://www.barrons.com/article_email/artificial-intelligences-winners-and-losers-1509761253-lMyQjA1MTE3NjA2NDgwNzQ2Wj
Which white-collar jobs would fall first is an anxiety-producing question. Tasks nowsuited to so-called Robotic Process Automation are those in which workers apply well-defined rules to predictable data inputs. Oracle (ORCL) says a new product will domuch of the work of a database administrator. Such products show why the outsourcingindustry, here and abroad, is nervously looking over its shoulder. A.I. is ready to handletech support, transaction processing, and other activities that outsourcers moved toplaces with cheap labor—so job loss won’t be a problem just for the U.S. and other richnations. White-collar automation projects have become big business for outfits like IBM(IBM) and Britain’s Blue Prism Group (PRSM.UK), who are not eager to discuss the tollon employment.
We’d better all learn about machine learning.
Follow @blalpert
Email: [email protected]
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