AI is the new electricity

July 11, 2016

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Six reasons why artificial intelligence is a lot like electricity, starting with, ‘You plug it in – and it works.’

“AI is the new electricity,” said Andrew Ng, Associate Professor of AI at Stanford University, at MIT’s EmTech Conference on Artificial Intelligence. AI is the new electricity? Huh? Wait a minute.

One could argue that electricity is one of humanity’s greatest inventions. It ranks right up there with the wheel, the printing press, the combustion engine, and the telephone. The use of electricity has changed our lives to such an extent that life without it would be almost unthinkable. It is so fundamental to our lives that it is almost invisible.

My team and I reviewed the topic postmortem and below are some of the key similarities between electricity and AI that we discussed:

You plug it in – and it works

Electricity: The easiest integration model ever – assuming you have the right adaptor.

Artificial Intelligence: Very similar to the early years of electricity – you needed to buy into the ecosystem or your system will not be compatible. However, this is quickly changing as an integration fabric is emerging that is enabling disparate systems to quickly integrate.

You can’t imagine living without it

Electricity: Quick, think of 10 things you used electricity for in the last 10 minutes. Enough said.

Artificial Intelligence: Today – contextual awareness is creeping into our phones – and most people don’t even know it. The AI magic we see in image recognition, voice translation, predictive modeling, is increasing every month.

The adoption rate is the traditional “Hockey Stick” inflection model

Electricity: The lead up to commercial viability took over 100 years – but 1900-1920 was when things quickly transformed modern society.

Artificial Intelligence: Academics and researchers have been discussing AI since the 1950’s. The commercialization of AI like services has already started – and it’s only a matter of time before “AI powered” will be the new “Electric” motor, “Digital” widget, or “Internet” enabled offering. Expect the next 10-20 years to be the gold rush of our generation.

New businesses popped up overnight

Electricity: Factories to create electricity, factories to create light bulbs and factories to create appliances

Artificial Intelligence: API orchestrators, facial recognition, voice and language translation, and legacy enterprises selling their data sets to feed algorithmic engines that drive new service offerings.

It changes the talent pool

Electricity: Just as electricity changed the business model, it required new skills, which created new jobs. As people started doing new things in new ways, the old ways and the skills required to support them were no longer necessary.

Artificial Intelligence: AI’s impact will create transformational technologies that will drive skill transformation over the next 20-30 years. As an example, when you add AI to machines, you get smart robots – and these robots will replace many service types of jobs in the future. As AI-like services mature, there will be a period when supply and demand will be out of balance and jobs will be affected. At the same time, new types of jobs will emerge. Humans will be required in jobs where we can add value–emotionally or intellectually–not just perform routine and repetitive tasks.

The cost to produce the service is reduced over time

Electricity: In the early 1900’s electricity cost $4.50 per kilowatt hour. It continued to fall into the 1920’s when it stabilized in the $0.20 range (pricing adjusted for inflation). Since the 1930’s the price of a kilowatt hour has remained relatively flat.

Artificial Intelligence: The cost to build a large AI platform and ecosystem (taken into account compute, storage, power, and software) can easily run into the millions of dollars. However, as this technology continues to mature, costs continue to drop – and in the next 10-20 years, we should see the price adhere towards a utility model and flatten out. Once it price begins to flatten – we expect a tiered pricing model to be introduced – a free (or freemium model) for simple activities, and a premium model for discrete, business differentiating services.

It’s the same – but different

Flying deep into a search engine black hole – something else jumped out. When electricity started to make its way into the home – it transitioned from a noun to an adjective. Some examples: Electric Motor, Electric Drill, Electric Iron, Electric Bicycle, etc. I realized that this is a common way for new technology to be embedded in the human vernacular. In the 1980’s – it was “computerized,” in the 2010’s it was digital. It won’t be long until we start seeing “Intelligent” or “AI Powered” before even the most interesting of items.

Just as electricity is fundamental to the way we live, in the not so distant future, it is not hard to see how AI will become the new electricity – embedded and/or supporting just about every aspect of our life.

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Contacts

Chris Curran

Principal and Chief Technologist, PwC US Tel: +1 (214) 754 5055 Email

Anand Rao

Global Artificial Intelligence Lead, PwdC US Tel: +1 (617) 530 4691 Email