19 Apr 2018 / Business Trends
AI is the next big thing, but it has to become smarter first. How blockchain can help
Artificial Intelligence (AI) is energetically pushing forward into the business: no matter the size or type, firms are starting to understand that AI could help them to better forecast demand and improve the supply activity, hire more qualified workers and improve productivity or deal better with the clients and improve customer satisfaction. Subsequently, lots of money is pouring into the AI-based technology. All the signs say that AI next big thing.
Companies around the world spent a whooping USD 22 billion on AI-related mergers and acquisitions in 2017 (from under a USD 1 billion in 2015), according to data published by the think-tank McKinsey Global Institute.
Also, consultancy firm KPMG says that venture capital for AI doubled to USD 12 billion last year. All this money are not for nothing: McKinsey estimates that just applying AI to marketing, sales and supply chains could create economic value, including profits and efficiencies, of USD 2.7 trillion over the next 20 years.
Just looking at these figures and we can already see how spectacular the rise of artificial intelligence and machine learning has been recently. And it continues to accelerate and promises to deliver major value across a broad variety of industries. Artificial intelligence is enabled and powered by vast quantities of data, with their accuracy, usefulness, and benefits improving as more data become available. In other words, the more data is available to them the smarter AI applications become.
The problem here is that in many industries data is currently spread out across and locked within multiple silos and it is shared only in a limited extent or is not shared at all. This means that the full potential of the technology cannot be achieved in such circumstances. But how blockchain and its most promising application, smart contracts, can help?
First of all, blockchain and smart contracts enable secure and efficient data sharing and processing across industries and business-to-business networks, therefore leading the way for increased discovery and access to data across these networks. This provides a solid foundation that enables AI to realize their value to businesses, radically improving the internal processes and the customer relationships, while also delivering major cost reductions.
Smart contracts and blockchain technology in general hold great potential for the automation of business relations, reducing the need for paperwork and expenses with lawyers and court services, thus perfectly correlating with the objectives artificial intelligence is designed for.
For example, putting artificial intelligence and blockchain together in an integrated system could automate the laws regulating an industry – let’s say banking or financial services – in such an extent that the time and money consuming paralegal activity will become obsolete.
Having enough data to train artificial intelligence models has been a challenge since the beginning. Traditionally, only companies with a ton of users have access to large datasets, but now blockchain is laying the foundation for a new decentralized internet in parallel with the rise of artificial intelligence and machine learning systems. This data decentralization promised by blockchain is a perfect fit for getting more datasets into the hands of the AI community, whose backbone is made rather by start-ups than big tech.
As we wrote in our previous post on the topic, blockchain has the potential to disrupt the big tech’s monopoly and to end the internet’s permanent tendency towards centralization. Blockchain is facilitating new ways of working, while the artificial intelligence quickly became an exponential technology that the world cannot ignore. Playing AI ecosystem on blockchain will take the power that only companies like Facebook, Amazon or Google has and put it into the hands of the community. This is true decentralization and things are going to get exciting from here on.
Developing artificial intelligence ecosystems does not only mean the liberalisation of their access to a pool of vast data. As in the case of real world – where interaction between individuals leads to development through exchange of ideas – artificial intelligence ecosystems also need to interact with each other in order to become better. And currently we see no better way to facilitate this interaction than the blockchain-based smart contracts, which use software code to automate tasks faster and with virtually no error.
But the relationship between AI and smart contracts is not unidirectional, but a mutually beneficial one. AI can power the analysis necessary both to create and execute complex smart contracts and make them more effective. The more data AI has, the better it can predict outcomes. For example, in contract negotiation, AI can analyze past negotiations to see how parties negotiated in the past and suggest the types of language and clauses most likely to secure agreement. AI can also analyze past contracts to identify variables not previously considered, and incorporate them into future contracts.
In conclusion, data is essential in training AI systems, but we also need algorithms that run in a decentralized and distributed manner on blockchain in order to processes that data. And this is what we are working at right now: our SmartFabric solution is aimed at building an infrastructural blockchain that allows users to write machine learning programs among others.
An executive in the tech industry has gone so far as to declare that AI will do more for humanity than fire or electricity. We can’t say if this is true, but we are convinced that putting together artificial intelligence and blockchain certainly fire up world’s development. Keep close if you don’t want your business to be burnt and swept away.