The Rise of Artificial Intelligence

Manifestations of artificial intelligence (AI) stretch back as far as Greek mythology however, it has only taken off in a huge way in recent years. As interest in this field grows more, big-name companies, such as Google, Yahoo, Apple, Intel, and IBM are competing to acquire private AI technology development companies, with nearly 140 companies having been acquired already. Market research firm Tractica has predicted that spending on AI will grow from $640 million in 2016 to $37 billion by 2025.

A front runner in the development of AI has been the UK, where London-based venture capital company Octopus Ventures first invested in the natural knowledge answer engine Evi (now the technology behind Amazon’s Echo) in 2008. The firm continues to be an active investor in AI, selling products, such as the app Swiftkey, to high profile companies like Microsoft. Octopus Venture’s Investment Director, Luke Hakes, believes that their AI successes are why the UK is now the inspiration for other countries in how AI can be commercialised, and this growing interest will have the effect of more funding being put into AI companies.

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As well as seeing the AI market itself grow exponentially, other companies are experiencing growth off the back of AI’s success. Companies who develop and make chip technology have seen a revival as the demand for new AI products had prompted the need for chips tuned to carry out very specific functions, and with the ability to store and synthesise information in novel ways. Companies such as Advanced Micro Devices, Intel, and Nvidia have all benefited from this growth, with Nvidia’s latest quarterly results stating that it has nearly tripled sales of chips to data centers involved in AI. 21% of the company’s revenue is now from computing tasks that include AI, amounting to $409 million for the last quarter.

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Growth in this sector is being spurred on as well-established companies implement AI technologies to enhance their user experience. Facebook has developed its own AI program, DeepText, that analyses posts to understand the context of them, recognises faces in photos to make it quicker to tag people, and is even able to identify people and their voices in video content. Outside of the online sector, much research is being carried out into the use of AI in the transport field. By 2035 around 76 million vehicles with some level of autonomy will be in use, comprising a market that will be worth $77 billion.

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Although much of the development into these technologies is relatively new, investment in AI seems to be strong and stable, with a predicted steady increase in the future.

(Please note: James O’Leary does not currently hold a position in Google, Twitter, Intel, IBM, Advanced Micro Devices or Nvidia. Henry James International does not currently own a position in Google, Twitter, Intel, IBM, Advanced Micro Devices or Nvidia for any client portfolios. James O’Leary does currently hold a position in Apple. Henry James International does currently own a position in Apple).

pixaAll content in this blog represents the opinion of James O’Leary

Digital Developments – The Wearable Technology Market

Developments in the digital era have meant that it is easier than ever before to take your work with you. Phones now serve not only for making calls but also as devices for sending emails, keeping up-to-date with world news, and keeping track of to-do lists and calendar engagements. One digital sector that has seen growing interest recently is that of wearable technology. Wearable tech has been around in one form or another for centuries, but a boom in popularity began in the 2000s when companies began developing devices that took keeping fit on the go to a whole new level. Since then the wearable technology sector has taken off, with the number of wearable tech devices being shipped increasing from 29 million units in 2015 to 33.9 million units in 2016, growth of 16.9% year-on-year.

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Having launched their first product in 2008, a fitness tracker wristband, Fitbit initially experienced high levels of commercial success. However, recent figures show that the company may now be in a period of declining consumer interest. Shipments in the 4th quarter of 2016 were down 22.7% compared to the same period of 2015, with numbers dropping from 8.4 million units to 6.5 million. In terms of market-wide success, in the first quarter of 2017 Fitbit accounted for 13.2% of all wearable technologies shipped, in comparison to the 24.7% of the market that it made up a year ago. It is thought that the drop in Fitbit products may be due to a reducing demand for fitness bands and the company’s slow entry into the market for smartwatches. However, CEO of the company, James Park, believes that as the market for wearable technology develops, new opportunities for renewed growth of Fitbit will present themselves.

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As Fitbit sales decrease, the way has cleared for other big-name tech companies to take a larger portion of the market. With the launch of the new Apple Watch series 2 in September 2016, Apple has seen an increase in sales from 4.1 million to 4.6 million, a growth of 13%. The company has overtaken Fitbit as number one in the wearables market in the first quarter of this year. Close behind Apple, Chinese technology company Xiaomi has also overtaken Fitbit to second place in the market. Indeed the company has been the fastest growing in the industry, experiencing a year-on-year increase of 96.2% in sales, from 2.6 million to 5.2 million from 2015 to 2016. Much of this growth was due to shipments of their tracker, Mi Band Plus.

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While Fitbit may be experiencing a period of declining interest, the wearable technology market as a whole is bigger than ever, and with new products constantly being developed and introduced it is likely that interest in this sector will continue to grow.

(Please note: James O’Leary does not currently hold a position in Fitbit, Apple, or Xiaomi. Henry James International does not currently own a position in Firbit, Apple, or Xiaomi for any client portfolios)