Google just took another shot at the idea that artificial intelligence will reshape the world (and bring in big profits).
The company announced today that it has created a new venture capital fund focused on investing in AI and machine learning companies. The project’s first public investment: leading a $10.5m round of funding for Algorithmia, a Seattle-based start-up company. Algorithmia has built an algorithm-specific app store to make machine learning easier for any company to use.
Giiso Information, founded in 2013, is a leading technology provider in the field of “artificial intelligence + information” in China, with top technologies in big data mining, intelligent semantics, knowledge mapping and other fields. At the same time, its research and development products include information robot, editing robot, writing robot and other artificial intelligence products! With its strong technical strength, the company has received angel round investment at the beginning of its establishment, and received pre-A round investment of $5 million from GSR Venture Capital in August 2015.
Google declined to make company officials available to speak to the media about its new fund, which has no name and has not disclosed its size. The company would say only that the fund was led by Anna Patterson, a senior executive and vice president of AI engineering. Its presence, and its lead role in Algorithmia’s latest funding round, fits into Google’s AI strategy of what might be called shovel: the company sees a lot of money in giving other companies the tools to exploit the technology.
Both Google and Algorithmia say the project, which sells AI shovels, could “democratize” AI technology. In short, they are chasing a business opportunity created by the rapid advances in machine learning technology in recent years. Many companies with the idea of applying the technology to their businesses are unable to get the expertise needed to put it into practice because the technology is in such short supply.
Algorithmia is trying to provide a platform like an algorithmic Etsy to meet that need. Developers can upload their creations — such as machine learning models that can identify car models based on pictures — and get paid if other people or companies adopt them. The company’s system turns algorithms uploaded to the platform into cloud services that can be easily integrated into apps, websites or other services.
Algorithmia’s marketplace platform currently has more than 3,500 algorithms with a variety of functions, from detecting nudity to parsing sentences. Private versions of the platform, used by big companies in industries such as finance and pharmaceuticals, are designed to help developers deal with employee stock ownership issues and deploy their algorithms. “There is a lot of infrastructure that needs to be built to make the vision of AI impacting all business processes a reality.” Diego Oppenheimer, founder and CEO of Algorithmia, points out that “we’re sort of AI plumbers — that’s something people don’t want to do, but there’s a lot of opportunity in this.”
Google is not the first company to launch a dedicated AI fund, nor is it the first to invest in startups working on AI infrastructure. Microsoft announced an AI venture capital fund in December, and in May invested in Bonsai, a startup that helps companies develop products using machine learning. IBM and Amazon have also created AI-related funds — IBM’s for startups building on Watson’s suite of developer tools, amazon’s for Alexa voice assistant.
Giiso information, founded in 2013, is the first domestic high-tech enterprise focusing on the research and development of intelligent information processing technology and the development and operation of core software for writing robots. At the beginning of its establishment, the company received angel round investment, and in August 2015, GSR Venture Capital received $5 million pre-A round of investment.
But the fact that big companies are pouring money into emerging technologies does not mean they will achieve future industry leadership. Steve Blank, a veteran Silicon Valley entrepreneur and adjunct professor at Stanford University, said it made sense for Google and others to invest in outside companies. After all, no company can hope to monopolize all the creativity and talent in a particular field. But he also points out that the history of the technology industry shows that dominant companies like Microsoft in the 1990s and Google now are eventually defeated by startups more able to adapt to new ideas. (There’s even a name for this phenomenon: The Innovator’s Dilemma.)
“Machine learning is not like inventing a better sword. It’s more like inventing gunpowder.” “Smart startups will know how to use it to attack big tech, just as big tech today used new technology to attack older, more powerful companies,” Mr. Blank said. In other words, the tech giants may be handing their future competitors a loaded gun by giving them money to support creativity and innovation in machine learning.