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How Netflix's AI Saves It 1 Billion Every Year -- The Motley Fool


When you think of leaders in artificial intelligence, Netflix (NASDAQ:NFLX) doesn't usually jump to the top of the list. But the streaming video service's VP of Product Innovation Carlos Uribe-Gomez and Chief Product Officer Neil Hunt published a paper that says some of its AI algorithms save Netflix 1 billion each year. In their paper, the two Netflix execs detail how the company's recommendation engine impacts its churn rate. Netflix no longer reports its churn rate, but the paper notes that Netflix's "retention rates are already high enough that it takes a very meaningful improvement to make a retention difference of even 0.1%." Let's dive into how the recommendation engine saves Netflix money -- and what the return on investment looks like.