Last week, I sat through a session by GE’s Global Head of Digital. He gave us a really great example of the type of work his team does for GE. Well, at the time I didn’t think it was so great, but the more I have thought about it the more impressed I am. Using Algorithms and AI, they’ve been able to improve the amount of electricity a wind turbine produces by over 5%, while reducing maintenance and breakdowns. What they’ve done is put sensors on each of the veins of a turbine, along with sensors outside the turbine to monitor weather and wind. The data from these sensors is then analysed and, in real time, thousands of options for adjusting the turbine are evaluated. The most optimal setup is then selected and applied. With the feedback received, further options are evaluated and more adjustments made.
GE are making really good money from this, as they have a simple deal with clients to share any additional revenue generated. GE have been so successful that clients are now asking them to implement this system on their competitor’s turbines. A real win for GE.
Over the whole system GE manages, a 5% increase in productivity generates a lot of revenue.
But it’s not just the revenue numbers that impressed me. On reflection, I realise that this is actually the future of AI, algorithms and the “industrial IoT” (a phrase coined by Jeff Immelt’s GE). This is where we move beyond bots, beyond the sexy front end of AI, to machine learning that leads to genuine improvements in productivity and immediate bottom-line rewards.
And then, I read an article by Jensen Harris on Medium, called “Why bots aren’t the real AI disruption: The quiet rise of headless AI”. This makes a lot of sense to me now.
This paragraph sums it up:
“While being able to talk to your CRM is cool, having a sales platform that accurately predicts the 100 opportunities you can close this quarter is worth breaking the bank for. Having a cute avatar answer your customer support chats seems nice enough, but predicting ahead of time what areas of your product will get support requests so that you can fix them before customers suffer is pure gold.”
Read Jensen’s full article here, or a summary below:
Why bots aren’t the real AI disruption: The quiet rise of headless AI
by Jensen Harris
Bots are eating the world. Whether you are an enterprising app developer building the essential software to bring a virtual Taylor Swift into your Slack chats, or just lonely and in need of a dumb, annoying virtual friend to message you on Facebook, we seem to be clear on one thing: many experiences, apps, sites, and products are breathlessly going to be replaced with bots….
It’s official: “bot for X” is the new “Uber for X”.
And sure, bots are cool. Ever since ELIZA struggled to pass the Turing Test and HAL 9000 murdered his crew (later reincarnated in a hardly-remembered Apple Super Bowl commercial) we’ve been infatuated with the idea of computers as our inevitable sidekicks.
Bots center around one specific niche aspect of artificial intelligence: conversational understanding. Human factors experts have long been enthralled by the idea that a more natural way to communicate with computers would be through speech, and we’ve spent the better part of a century building to a point where natural conversations may soon be a reality.
While this is indeed an important step forward in human-computer interaction, it is truly just one small part of what AI is about—and not the part that will matter the most for the enterprise companies who actually buy almost $4 trillion in software and services each year.
While the added convenience of language recognition is a benefit, until bots are capable of performing very complex and novel tasks that richly combine actions and context across the boundaries of apps and sites in unique ways the first time they are asked, we will be limited to trying to remember the 489 commands Siri recognizes.
The rise of headless AI
But I’m not down on bots. I’m just a lot more excited by the less-flashy flavor of AI that is changing the nature of work itself: headless AI.
Headless AI is the application of artificial intelligence to vastly improve internal business processes.
It is fully transforming the crucial machinery of business—processes like hiring, lead generation, financial modeling, and information security. Legacy software has become commodity in all of these areas, and purpose-built AI solutions will get a larger and larger wallet share of these huge enterprise cost centers.
Headless AI combines machine intelligence and learning loops to constantly evolve. Because these solutions plug into the data lifeblood of a company, they become incredibly valuable as the algorithms adapt to the patterns that work.
I call this form of AI “headless” because, unlike bots, the value is mostly not about the personality. Headless AI works with humans and augments their strengths; it doesn’t try to replace them. It gives people superpowers.
While being able to talk to your CRM is cool, having a sales platform that accurately predicts the 100 opportunities you can close this quarter is worth breaking the bank for. Having a cute avatar answer your customer support chats seems nice enough, but predicting ahead of time what areas of your product will get support requests so that you can fix them before customers suffer is pure gold.
It’s happening! (already)
Though bots get all the glamour, headless AI is quietly happening everywhere already. These new platforms are generally purpose-built solutions optimized around specific domains and outcomes data. They learn not from people talking to them, but by voraciously chomping up all of the relevant proprietary data fed into them. The best systems employ learning loops and massive streams of incoming data to constantly improve.
This creates a multiplier effect: the earlier and more pervasively an organization rolls out headless AI solutions, the more quickly the positive results compound. If you wait a year to deploy, you don’t just lose the year of improved productivity — you lose the year of learning and adaptation of the software to your company’s patterns. This puts you doubly behind.
… DeepMind helped Google reduce power consumption in their data centers by 15%. A former NSA analyst created Area 1 Security to predict cyberattacks before they happen. …
Headless AI is where the money is
… there is a lot of money to be made in transforming the efficiency of core enterprise functions. This is what headless AI is all about.
If you can improve a crucial business process in a decisive way by a clear and measurable amount, that is incredibly valuable.
What is most game changing about this kind of software is that it is purely quantitative. Unlike a bot, where the potential return on investment is fairly qualitative (“customers liked interacting with the bot”), most headless AI is fully in the realm of predicting the future and then helping you change that future. Something where the return on investment is measurable and evident.
Improving, in real life, the quantity, quality, and demographics of the people who walk through your front door with resumes in hand… how much is it worth to more quickly hire better people than your competition?
If you can predict exactly who will buy what, when… how much could you improve your customer experience?
Because this kind of software proves itself through the numbers, it is inherently valuable and easy to budget for. Headless is where the real AI money is.
Headless AI everywhere
In the near future, every core business function will have been transformed by AI — hiring, sales, security, marketing, finance, manufacturing… everything. Purpose-built headless AI platforms will provide the new infrastructure which will drive every business.
The enterprises who are already on this train are getting an outsized advantage until everyone else catches up. Legacy software will get squeezed down into a smaller portion of the IT wallet as the most valuable services become the native AI platforms — just as form-based desktop software got squeezed out by the cloud in the last generation.
Bots are here to stay. They’ll keep getting headlines. “OK Google, search for tacobot.”
But the real enterprise revolution is happening in the companies who are using headless AI to transform their core businesses.
Source: Jensen Harris
Another important quote from Jensen’s article is this:
“This creates a multiplier effect: the earlier and more pervasively an organization rolls out headless AI solutions, the more quickly the positive results compound. If you wait a year to deploy, you don’t just lose the year of improved productivity — you lose the year of learning and adaptation of the software to your company’s patterns. This puts you doubly behind. … The enterprises who are already on this train are getting an outsized advantage until everyone else catches up. Legacy software will get squeezed down into a smaller portion of the IT wallet as the most valuable services become the native AI platforms — just as form-based desktop software got squeezed out by the cloud in the last generation.”
What is your company doing to start early experiments in headless AI?