As artificial intelligence (AI) technology goes mainstream, its potential to reshape sectors remains years away, says Moody's Investors Service. AI is a broad concept covering many different applications and models. After decades of slow progress, AI technologies have advanced meaningfully in recent years on increases in computing power, large and growing datasets and improvements in underlying algorithms. From large multinationals to small startups, companies are investing heavily, and real-world applications are becoming mainstream. While there are many applications for AI, high tech and media, automotives, financial services and manufacturing are particularly intense users at this stage. Big tech firms have built a strong position. The largest technology firms such as Google parent Alphabet Inc, Amazon.com Inc and Microsoft Corporation account for a large share of the recent increase in AI investment, and have the potential to capture an outsized share of the value that AI will generate. Moody's said that while these firms' formidable financial resources enable them to develop new capabilities and applications through in-house R&D as well as acquisitions, they also have meaningful strength in collecting, analysing and, ultimately, "monetising" data, which will only be enhanced through AI. AI could change competitive dynamics in several sectors. Many of today's AI applications are focused on enhancing efficiency and profit margins through automating routine tasks, optimising R&D, reducing error rates or improving forecast accuracy. Players that provide value for customers can also increase revenues. According to Moody's, the firm-level impact of AI will depend on each competitor's strategic vision for best utilising the technology's capabilities and financial resources to invest in systems and people. It will likely be some time before the implications for competition within sectors become clear. AI could affect human resource allocation within firms and across countries. Some AI applications will likely displace some types of human labour, while necessitating skill retraining of significant segments of the labour force. Countries with lower-cost, skilled labour could lose their comparative advantage in manufacturing that can be facilitated by robotics.
Feb-10-2018, 02:14:58 GMT