What is an "AI first" company?
Non-deterministic and systems that learn
What is an “AI first” company ? Do you remember those days when a company was called a “mobile first” company, or even before that, a “built from the ground up to be web-based” company … or even before that a “built from the ground up to be client server” company ? I won’t bore you with any stories of the latter, but I want to touch on the former: what an ‘AI first” company is. I recently heard an AI practitioner at a large financial institution (BNY Mellon, manages 20% of all investable assets !) define an “AI first company” as one whose systems meet the following two criteria:
non-deterministic (i.e., stochastic, where there is variability in outcomes and results)
learns continuously from data (i.e., the systems’ answers change over time)
I have written a blog post about deterministic versus stochastic, and let me recap: A task with only one correct answer is known as a deterministic situation. A stochastic environment is one where there are different outcomes possible. Buying a product on an e-commerce site such as Amazon.com provides an example of the distinction between deterministic and stochastic. Prior to 1998 when one searched for a book on Amazon.com the results showed just that book. That is an example of a deterministic situation (I like to use this phrase “one question, one result” to refer to a deterministic task). After 1998, Amazon.com started providing recommendations such as “books similar to this one” or “frequently bought together”. The latter is an example of a stochastic environment, where “one question, multiple results” is the norm. Another way to think of stochasticity is to image a situation that involves prediction, such as predicting the weather, prices etc.
Given a stochastic environment, one other aspect is that the results can change over time, because the systems learn from the environment (i.e., from data whose nature changes over time). For example, an individual in the technology industry used to buy technology books online and was offered recommendations on other technology books. Over time that individual’s lifestyle changed, such as starting to go to a gym or starting to go on outdoor hikes. Now the e-commerce site also displays books or products related to those extracurricular habits.
Who are the AI-first companies? It is unlikely that any company is completely AI-first. Companies, such as BNY Mellon mentioned above, are making strides towards becoming more and more “AI first”. When I think of AI first companies here are the questions that come to mind:
Data-driven: how data driven is the company ? (Companies like Google, Amazon likely lead this pack)
Non-deterministic: how well prepared are the company’s systems and processes for non-deterministic tasks ?
Continuous learning: do the systems learn from data and adapt ?
Recently I heard of a very high ranking executive at a premier technology company stating that in the future there’ll be only two types of companies: “AI first” companies and dead companies. That is an ominous message. The good news is that with all the investment and innovation around AI companies and organizations have the necessary tools and human capital to transition to an AI-first model. In 2011 a very successful venture capitalist wrote an essay titled “Why software is eating the world.” Now AI is eating the world.