Artificial Intelligence Moves to Top Corporate Spending Priority


Apple‘s hiring of Google’s former head of search technology and artificial intelligence is the latest sign that AI is becoming a major battleground for tech companies.

Artificial intelligence and machine learning have become “a top 10 spending priority” for corporate chief information officers, Morgan Stanley analyst Katy Huberty said in a note to clients Friday. Apple’s recent hiring of AI expert John Giannandrea “reinforces this view,” she said.

“With the hiring of Mr. Giannandrea, who will report directly to Apple CEO Tim Cook, Apple is telling the world they are aiming to become a more serious player in the AI/machine learning industry,” she said.

Deployment and evaluations of AI and machine learning systems have steadily increased over the last year, Huberty said. A Morgan Stanley survey out this week found that 48% of chief information officers are installing or testing AI and machine learning systems this year, up from 33% in April 2017.

AmazonMicrosoft and IBM were the top AI vendors in the first-quarter CIO survey, Huberty said.

Amazon Machine Learning on Amazon Web Services and Microsoft Machine Learning on Cortana tied for first place in the CIO survey. Microsoft and Amazon were each picked by 13% of respondents who were asked to name AI vendors they currently use or plan to use. IBM Watson was a close third with 12%, followed by Machine Learning with Apex at 7% of respondents.

IBM Loses AI Lead

Last year, IBM had a notable lead over rivals in AI deployments and evaluations, but Amazon and Microsoft have quickly caught up, Huberty said.

“We expect market share will continue to shift among leading vendors given the infancy of the AI/machine learning market,” Huberty said.

Chief information officers surveyed by Morgan Stanley on average expect their information technology spending to rise 5.8% this year.

“This is the most bullish CIOs have ever been in overall IT budget growth in the past 10 years,” Huberty said.

Cloud computing and security are the top priorities, followed by digital transformation initiatives, she said. AI and machine learning initiatives ranked sixth in the latest survey, up from No. 20 a year ago.

Morgan Stanley surveyed 100 enterprise CIOs in the U.S. and Europe for its April survey.

Apple AI Hire An Adrenaline Shot

Apple has largely focused on artificial intelligence applications for the consumer sector, including its digital assistant Siri. For corporate and enterprise applications, it has partnered with IBM.

Wall Street analysts say Apple hired Giannandrea away from Alphabet-owned Google to improve Siri and help with its autonomous vehicle project.

Apple’s hiring of Giannandrea will be an “adrenaline shot” to the company’s AI efforts, Loup Ventures managing director Gene Munster said in a blog post. He “brings credibility to Apple AI, critical in recruiting, and is likely (to) work on AI-powered interfaces and Apple’s self-driving car program.”

Read the source article at Investor’s Business Daily.