This article was originally published on Kiplinger – https://www.kiplinger.com/
Artificial intelligence became a reality in millions of American homes during 2017 with the success of Amazon.com’s (AMZN) Alexa, a speaking interface that was the top app downloaded on Android phones and iPhone on Christmas Day.
What your PC calls an application and your phone calls an app, Alexa calls a “skill.” Once a skill is supported, you can call it up when you’re in range of an Alexa device using your voice. Amazon stormed the 2017 Consumer Electronics Show, showing Alexa support in hundreds of products. By Christmas, it was in a host of other Amazon devices, including a screen that can make video calls, a TV remote, an alarm clock, and cheap speakers for every room in the house, with millions sold this past Christmas.
The Amazon Web Services cloud is also the leader in selling “deep learning,” a system that allows software to improve as it’s used. Some deep learning systems find patterns from huge amounts of data in cloud systems. Others, like Alexa, are simpler voice recognition systems. It was Amazon’s early lead in selling its cloud capacity that brought deep learning to the company.
“Voice changes things massively,” says Jason Thane, CEO of General UI, a Seattle-based software developer. “It makes the user interface much more human. Computers are becoming more organic and integrated into everyday life.”
Voice interfaces bring artificial intelligence into the home, but there are many other applications, and Amazon can take advantage of them all. Gary Saarenvirta – CEO of Daisy Intelligence in Vaughan, Ontario, Canada, which develops AI applications and sells them as services – says groceries are the “cutting edge” of AI. Applying intelligence to recipes and menus reduces food waste. “Most retail technology started in grocery,” from bar code scanners to inventory management, he says. He believes it’s why Amazon bought Whole Foods Markets – as a way to profitably push the envelope of AI in retail.
Kerry Liu, CEO of Rubikloud in Toronto, which works on adapting AI to retail, says Amazon is “light-years” ahead of rivals and could eventually separate its software business from retail entirely because retail has such low margins. It’s crazy to pay more than 4 times sales for a retailer, but Amazon isn’t really a retailer anymore.