An artificial intelligence expert while being at a Fintech conference in New York gave a bold statement: someday there would be a company with a market cap of 1 trillion dollars. He predicted that this valuation which seems incredible right now would be based on the company’s extensive use of AI. He was correct in one perspective: Apple has become the world’s first trillion-dollar company a little over a year later. But what about the second part of the prediction? Is it because of artificial intelligence that Apple has a staggering valuation? It is a big question whether AI and Data analytics are driving business growth?
Apple makes use of Data Analytics and AI heavily. Siri provides speech recognition and other expert systems send you alerts according to your physical location. Apple music focuses on your listening habits and forms the playlists according to your regular listening habits. Apple Fitness+ takes the data from Apple watch to help the users focus on their health and well-being. In 2018 Apple’s head of AI, John Giannandrea joined the executive team of the company.
The same press release announced John’s appointment which offered a fundamental insight into the reason behind the company’s success. It defines that Apple “leads the world in innovation” and not artificial intelligence. Through decades, the company created new product arenas. It was pioneering fresh Business models around music sales, mobile app subscriptions, cloud storage, and online payments. It is obvious for you to forget that only 20 years ago was the only business Apple had. Last year Mac products provided for 10.4% of the company’s revenue.
Human creativity is visionary where artificial intelligence cannot match up:
Apple’s fresh products and Business models focus on creativity and the ability to see beyond The horizon not on data analysis or artificial intelligence. Steve Jobs and Jony Ive were the creative leaders who saw the deficiencies in portable music players. But no algorithm would have helped them to create a fresh way to listen to the music. The iPod iPhone and iPad were created from their ability to envision ways to provide new technologies and an outstanding user-focused design. Services like iTunes and app stores grew from the company’s commitment to offering new and valuable experiences for their users.
It was the innovation and not artificial intelligence or analytics which generates the revenue that drives the companies trillion-dollar valuation. Also, Data analytics cannot provide such ground-breaking results. Even the sophisticated quantitative techniques including deep learning look backward are highly constrained and reductionist. They start working with an existing data set and look for the best answer from a limited number of predefined selections. The data-driven tools and their nature of work make them unsuitable when you want to come up with bold disruptive innovations. It can lead to something no one has ever experienced.
For instance one of the most promising AI technologies right now is the GPT-3 “few shot” learning model that shows the inability to work out creative tasks like developing synthetic news articles and computer code. Though its domain is primarily limited to natural language processing it uses that model with about 175 billion parameters.
Relying on artificial intelligence can hurt more than it can help:
Companies today face the danger of heavy significance on AI and quantitative tools which can hinder the creativity and the development of breakthrough creations. It will be difficult for a company to create something without relevant data.
No algorithm can justify investment in launching a breakthrough innovation. In addition to this, analytical tools use up the bandwidth to improve the business. In this kind of scenario, incremental innovation will rule the day. A known computer scientist Melanie Mitchell summarises the trap into which business often falls is: “the race to commercialize AI has put enormous pressure on researchers to produce systems that work well enough on narrow tasks.”
Quantitative tools are powerful and exciting but they can dominate a form that focuses heavily on narrow tasks to hinder breakthrough innovation. We cannot say that there is no role for data analysis. Data tools are known as enabling technologies that improve and extend the functionality of existing products. Companies should implement AI within their breakthrough innovations. For instance, in the absence of an algorithm that would take mobile data in early 2000 and come up with the iPhone the AI-driven assistant, Siri added value to this breakthrough innovation. AI is one of the many functional areas at Apple where it sits by hardware engineering software design and other business areas.
Other members of the trillion-dollar club illustrate the importance of breakthrough innovations. Companies like Amazon, Alphabet, and Microsoft paved their way to success not through artificial intelligence or big data, but by providing breakthrough innovations that changed and revolutionized the way we shop, work, and consume information. These companies have derived benefits significantly from analytical capabilities but they largely sell products that have come from human ingenuity and creativity.
Companies should not lose creativity:
Breakthrough innovations show up when ideas come up through a serendipitous conversation, an unexpected observation in a lab, or the ability to connect the dots of information from different domains. When Jony Ive joined Apple, he developed products that range from telephones to toilets but it had zero contribution to the computer industry. Yet he belonged to the heart of Apple’s new product successes for two decades since he could envision how new technologies build the world that doesn’t exist yet.
A sure path to success is not through incremental advance is but by offering breakthrough innovations. While a trillion-dollar form using heavily may rise someday, it is not here at this moment yet. Companies should not let the shiny new factor of ai and big data lose focus from the importance of human processes like creativity and discovery to unlock breakthrough innovation.