• Artificial intelligence (AI) has the potential to boost the UK gross domestic product by £232 billion, according to PwC.
• But AI startups in the UK say they're being constrained by a lack of access to serious computation power.
• The government-backed Digital Catapult said its new "Machine Intelligence Garage" should help to fix the problem.

The UK government has pledged to give artificial intelligence (AI) and machine learning (ML) startups access to computing resources and expertise through a new "Machine Intelligence Garage."

The initiative — announced by the government-led Digital Catapult organisation on Thursday — will launch on January 23, 2018 and run for three years.

AI could boost UK gross domestic product by around 10% by 2030, according to a report by PwC in June. But more than half of the UK's AI and machine learning (a field of computer science that gives machines the ability to learn without being explicitly programmed) startups are held back by a lack of access to computation power, according to a recent Digital Catapult survey.

"Access to computation power is amongst the significant barriers to innovation around machine learning and AI," said Dame Wendy Hall, the co-author of' "Growing the artificial intelligence industry in the UK" independent review, in a statement.

Machine learning systems have been achieving human-level performance in gaming and a variety of other domains recently, fuelled by large data sets. However, these techniques are expensive as a single training run for a machine learning system can cost over £10,000, according to the Digital Catapult.

Digital Catapult said the Machine Intelligence Garage will give AI and ML startups access to computing resources offered by Amazon Web Services (AWS), the Google Cloud Platform, Nvidia, Graphcore, STFC Hartree Centre, EPCC, Newcastle University, the Alan Turing Institute, Bart's Health Trust and Capital Enterprise.

Applications for the Machine Intelligence Garage will open every six weeks, with the first open call going live on Thursday. The Digital Catapult expects to accept at least five companies for each cohort. 

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• Nvidia is getting closer to offering a mainstream GPU based on its Volta architecture with the release of its new Titan V GPU.
• The card costs $2,999 and is aimed at artificial intelligence researchers. 
• Track Nvidia's live stock price here.

Nvidia has finally brought its Volta architecture to the PC in a consumer format with its new Titan V GPU.

The company is trading 0.97% higher at $193.74 after announcing the new chip, which goes on sale immediately for the out-there price of $2,999.

The new chip is based on Nvidia's Volta architecture, which is slowly replacing its previous Pascal architecture that is still widely available today. The Titan V is aimed at scientists and researchers in the artificial intelligence field.

The chip is about nine times more powerful than its predecessor, according to Nvidia. The new card illustrates Nvidia's focus on powering the next generation of artificial intelligence and machine learning, as the company is focusing on addressing the needs of researchers before releasing a card for the video gaming market.

'“Our vision for Volta was to push the outer limits of high performance computing and AI," Jensen Huang, CEO of Nvidia, said in a news release. "We broke new ground with its new processor architecture, instructions, numerical formats, memory architecture and processor links.”

The new cards are available for purchase from Nvidia, but they are being used in data centers for researchers to use via the cloud. Nvidia said it will begin offering access to the new Titan V card on its own computing platform immediately.

The Titan V is not aimed at gamers or cryptocurrency miners, two of Nvidia's largest markets. Those markets have been supply-constrained as cryptocurrency miners are scooping up cards aimed at video gamers to help speed up their crypto rigs. 

Read more about the interplay of Nvidia and cryptocurrency miners.

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• Microsoft has set up its own internal "university" to train Microsoft staff in the field of artificial intelligence.
• The company is also looking to hire people at machine learning conferences likes NIPS.
• Chris Bishop, head of the Microsoft Research lab in Cambridge, said he's keen to avoid "hoovering" up AI professors from universities.

Microsoft has set up an internal "AI University" in a bid to help it overcome the skills shortage in the booming field of artificial intelligence (AI).

Chris Bishop, the director of a Microsoft Research lab in Cambridge, UK, told Business Insider that the Microsoft AI University is one of several schemes Microsoft has implemented to address the lack of talent in the field of AI, where there's fierce competition between tech firms to hire the best people.

"We have a thing called AI University, which is an internal education programme so that people who are incredibly smart and capable but trained in a different domain can quickly learn about machine learning both in a foundational sense but also in a practical sense of how to use it," said Bishop.

When it comes to AI talent, Microsoft is competing with the likes of Amazon and Apple, who also have research offices in Cambridge, as well as DeepMind (owned by Google), Facebook, Twitter, and many others.

The global battle for talent is raging because of the potential AI breakthroughs that bright minds stand to make in the next few years thanks to recent advances in computation power and the availability of vast data sets.

AI is now at the core of almost all of the big tech companies' major products (think Apple's iPhone, Amazon Echo, Microsoft Surface, etc) and even fairly small advances in areas like speech recognition and image search could have a big impact on profits.

In a bid to attract the most capable people, the multibillion dollar tech giants are offering annual salaries in the hundreds of thousands of pounds and some people leading AI-focused teams at these companies are earning over £1 million a year, according to multiple sources that Business Insider has spoken to.

How Microsoft is recruiting AI talent

Microsoft is also trying to bring people into the company by finding talent at conferences and sponsoring students through university on the condition that they take a job when they've finished studying.

The Redmond-headquartered company has set up a large stand at an AI conference in LA this week called NIPS (The Conference and Workshop on Neural Information Processing Systems), where Bishop and his team hope to recruit a number of people.

Unlike some other companies, Microsoft is keen to avoid hiring all the best AI professors straight out of university, according to Bishop.

"One of the things we're trying to avoid doing is simply going into a university, hoovering up all the top professors and then just leaving tumbleweed blowing down the corridors," he said.

"That might be a short term fix for some companies but I don't think it serves even the industry itself very well, let alone academia or the nation, to take that rather short term view."

Dozens of AI researchers have left Oxford and Cambridge over the last few years for what are likely to be better-paid roles at DeepMind, according to LinkedIn.

Irina Higgins, for example, left her role as a machine learning tutor at Oxford in April 2015 before joining DeepMind as a research scientist in June of the same year. Higgins also completed a PhD in computational neuroscience and artificial intelligence at Oxford before leaving to join DeepMind.

Salaries at DeepMind averaged $345,000 (£258,000) in 2016, according to UK regulatory filings cited by Bloomberg. 

Bishop, who declined to comment on DeepMind's hiring, said his lab is funding masters degrees and PhDs at the University of Cambridge and other schools in a bid to spot talent early and get it on side.

"We try to work with them [universities] to fuel that talent pipeline," said Bishop. "So for example we're a major sponsor of a masters programme at Cambridge University." Bishop added that Microsoft Research has funded around 200 PhD scholarships at the centuries-old institution.

Other tech firms, including DeepMind, are also funding students through university but perhaps not on the same scale. Researchers from DeepMind are also giving AI and machine learning lectures to students, and some are even acting as PhD supervisors.

Staff from Microsoft Research in Cambridge also helped to develop the UK's new "computing" curriculum, which replaced ICT in 2014.

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• Google is opening a new artificial intelligence centre in China.
• There is a fierce battle for AI talent taking place between the world's biggest technology companies.
• China is home to some of the smartest minds in the field of AI and Google is keen to recruit them.

Google is opening a new artificial intelligence (AI) research centre in China as it looks to expand further into the country and capitalise on the nation's highly regarded AI expertise.

AI is one of the most competitive fields on the planet right now and tech companies like Amazon, Microsoft, Facebook, and Apple are searching far and wide for the best talent, offering hundreds of thousands of dollars in the process.

The Google AI China Center will consist of a small group of researchers supported by several hundred China-based engineers, according to Bloomberg.

The move is interesting given Google's complex relationship with China. Some of the company's best-known products have been blocked by China's government in recent years. But top executives at Google are keen to expand into the country. Eric Schmidt, chairman of Google parent company Alphabet, and Google CEO Sundar Pichai have visited the country this year. As have the leaders of DeepMind, an AI research lab in London that was bought by Google in 2014.

Fei-Fei Li, chief Scientist of AI/ML (machine learning) at Google Cloud, and one of the centre's leaders, announced the new Beijing facility in a blog post on Wednesday. "I am excited to launch the Google AI China Center, our first such center in Asia," Fei-Fei Li wrote.

"This Center joins other AI research groups we have all over the world, including in New York, Toronto, London and Zurich, all contributing towards the same goal of finding ways to make AI work better for everyone."

Fei-Fei Li will run the centre with Jia Li, head fo research and development at Google Cloud AI.

The centre will publish its own research and support the Chinese AI community by funding and sponsoring AI conferences and workshops, Fei-Fei Li said.

Google uses AI to automatically classify images and to power its voice assistant, which sits inside products like Google Home. But Fei-Fei Li warned that work needs to be done to ensure that AI needs to remain a benefit to all of humanity.

"As technology starts to shape human life in more profound ways, we will need to work together to ensure that the AI of tomorrow benefits all of us," she said. "The Google AI China Center is a small contribution to this goal. We look forward to working with the brightest AI researchers in China to help find solutions to the world’s problems."

Eric Schmidt thinks China will overtake the US on AI by 2025 

Last month, Schmidt warned that China is poised to overtake the US in the field of AI if the US government doesn't act soon.

Speaking at the Artificial Intelligence and Global Security Summit, the former Google CEO said: "Trust me, these Chinese people are good."

He added: "It's pretty simple. By 2020 they will have caught up. By 2025 they will be better than us. And by 2030 they will dominate the industries of AI. Just stop for a sec. The [Chinese] government said that."

Schmidt said that Chinese people "tend to win many of the top spots" in Google's coding competitions.

"If you have any kind of prejudice or concern that somehow their system and their educational system is not going to produce the kind of people that I'm talking about, you're wrong."

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• An artificial intelligence tool read all of the "Harry Potter" books and automatically generated a new, self-written chapter out of what it learned.
• The output text was mostly raw and incomprehensible, so a few writers intervened to make it understandable.
• The writing is mostly weird and borderline comical, but the machine managed to partly reproduce original writer J.K. Rowling's writing style.

There is a new chapter in Harry Potter's story, but it wasn't written by the original author, J.K. Rowling. Instead, an artificial intelligence (AI) algorithm did most of the hard work, The Verge first reported.

The people over at Botnik Studio fed a computer's algorithmic tool with all of the original novels from Harry Potter's saga, and in return, it generated a three-page chapter titled "Harry Potter and the Portrait of What Looked Like a Large Pile of Ash."

The AI churned out the bulk of the text, but in order to transform it from your typical predictive-text word salad to something actually intelligible, a number of writers were involved.

Chief among them is Jamie Brew, a former writer for The Onion and Clickhole, who had already worked on similar automated text prediction writings on Tumblr, where his objectdreams page includes procedurally generated, fictional work on X-Files, grammar rules, and even Craiglist ads.

With his and the other writers' work, The Portrait of What Looked Like a Large Pile of Ash has been curated to be grammatically correct and understandable, but the actual content is as weird as the title suggests — with things such as "BEEF WOMEN" being a door's password.

But it gets even better: "The pig of Hufflepuff pulsed like a large bullfrog," it reads at one point. "Dumbledore smiled at it, and placed his hand on its head: 'You are Hagrid now.'"

The writing is as weird as it is fun, and it might be worth a few minutes of your time; if you agree, you can read the whole chapter here.

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• The United Arab Emirates has become the first country to appoint a high-ranking government official as an artificial intelligence minister.
• The goal is also to make the UAE a leader when it comes to AI research, development, and innovation.
• The UAE hopes its AI initiatives will encourage the rest of the world to really consider how our AI-powered future should look.

From robots that can flawlessly perform backflips to electric cars that can go over 950 km (600 miles) on a single charge, it is becoming increasingly apparent that the future is far closer than we may have previously thought. If the missteps of the industrial revolution are any indicator, we need to start planning for that future today.

And it seems that this is precisely what the United Arab Emirates (UAE) is trying to do.

The nation’s efforts are mainly concentrated in the city of Dubai, which is already home to a number of futuristic projects, including plans to create a “Mars science city” and build a real life hyperloop, programs for renewable energy and electric vehicles, and tests for flying taxis and even flying jetpacks. Dubai even has an accelerator program aimed at expediting the creation of these various futuristic technologies.

Of course, no plan for the future can be complete without considering the role that artificial intelligence (AI) will play, so on October 19, the UAE became the first nation with a government minister dedicated to AI. Yes, the UAE now has a minister for artificial intelligence.

“We want the UAE to become the world’s most prepared country for artificial intelligence,” UAE Vice President and Prime Minister and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum said during the announcement of the position, according to Gulf News.

The first person to occupy the state minister for AI post is H.E. Omar Bin Sultan Al Olama. The 27-year-old is currently the Managing Director of the World Government Summit in the Prime Minister’s Office at the Ministry of Cabinet Affairs and the Future, and he holds degrees in Project Management and Excellence from the American University of Sharjah and a Bachelor of Business Administration from the American University of Dubai.

Just days prior to the announcement of this position, on October 16, Sheikh Mohammed officially launched the UAE’s AI strategy. According to the government’s official webpage, it is the first of its kind in the world.

AI as ubiquitous as tech

The goal is also to make the UAE a leader when it comes to AI research, development, and innovation. “In the UAE, we understand the positives and the potential for AI,” Al Olama told Futurism. “We have visionary leadership that wants to implement these technologies to serve humanity better. Ultimately, we want to make sure that we leverage that while, at the same time, overcoming the challenges that might be created by AI.”

Concretely, the UAE’s AI strategy covers development and application in nine sectors: Transport, health, space, renewable energy, water, technology, education, environment, and traffic.

The technology’s impact on education, in particular, could be quite dramatic, according to Al Olama. “With the internet, we’ve seen a generation that has so much knowledge,” he said. “Imagine if AI was able to help us deliver that content in a way that makes people understand it, memorize it, and be thought leaders in it. I don’t think the future will have tests, exams, or strict memorization. AI will help us actually make a more collaborative and personal learning process.”

He continues by noting that AI can do more than just help us learn new skills — it can help us learn what skills we have a natural aptitude for: “It will help us be able to identify what each person is good at, and then allow us to determine how to make sure that everyone has the information delivery method that they need in order to excel.”

For the UAE and Dubai, the potential for AI is obvious, and education is just the beginning. They hope to ensure that the tech eventually makes its way to all sectors of society that can benefit from it — including almost every single facet of modern governance.

In the official release, the UAE notes that the ultimate goal is to “provide all services via AI and [fully integrate] AI into medical and security services.” According to the same release, harnessing the power of AI would translate to a 50 percent savings in annual government costs by streamlining the nation’s 250 million yearly paper transactions, which currently require 190 million hours and 1 billion kilometers (621 million miles) in travel. Of course, AI’s potential as far as governance is convened goes beyond just this. The UAE’s strategy also includes the creation of a “new vital market with high economic value.”

Building the future

The UAE hopes its AI initiatives will encourage the rest of the world to really consider how our AI-powered future should look. “AI is not negative or positive. It’s in between. The future is not going to be a black or white. As with every technology on Earth, it really depends on how we use it and how we implement it,” said Al Olama. “People need to be part of the discussion. It’s not one of those things that just a select group of people need to discuss and focus on.”

To that end, they hope to bring governments, organizations, and everyday citizens together. “At this point, it’s really about starting conversations — beginning conversations about regulations and figuring out what needs to be implemented in order to get to where we want to be. I hope that we can work with other governments and the private sector to help in our discussions and to really increase global participation in this debate. With regards to AI, one country can’t do everything. It’s a global effort,” Al Olama said.

Today’s biggest tech companies, led by Google and Amazon, want to put AI at the core of their businesses, and the UAE and Dubai hope to do the same for an entire nation.

Disclaimer: The Dubai Future Foundation works in collaboration with Futurism and is one of our sponsors.

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• Developers are turning to machines that use artificial intelligence to spot fake news stories on the internet.
• AdVerif.ai currently works with content platforms and advertising networks in the United States and Europe that don’t want to be associated with false or potentially offensive stories.
• But AdVerif.ai isn’t the only startup that sees an opportunity in providing an AI-powered truth serum for online companies.

It may have been the first bit of fake news in the history of the Internet: in 1984, someone posted on Usenet that the Soviet Union was joining the network. It was a harmless April’s Fools Day prank, a far cry from today’s weaponized disinformation campaigns and unscrupulous fabrications designed to turn a quick profit.

In 2017, misleading and maliciously false online content is so prolific that we humans have little hope of digging ourselves out of the mire. Instead, it looks increasingly likely that the machines will have to save us.

One algorithm meant to shine a light in the darkness is AdVerif.ai, which is run by a startup of the same name. The artificially intelligent software is built to detect phony stories, nudity, malware, and a host of other types of problematic content.

AdVerif.ai, which launched a beta version in November, currently works with content platforms and advertising networks in the United States and Europe that don’t want to be associated with false or potentially offensive stories.

The company saw an opportunity in focusing on a product for companies as opposed to something for an average user, according to Or Levi, AdVerif.ai’s founder.

While individual consumers might not worry about the veracity of each story they are clicking on, advertisers and content platforms have something to lose by hosting or advertising bad content.

And if they make changes to their services, they can be effective in cutting off revenue streams for people who earn money creating fake news. “It would be a big step in fighting this type of content,” Levi says.

AdVerif.ai scans content to spot telltale signs that something is amiss—like headlines not matching the body, for example, or too many capital letters in a headline. It also cross-checks each story with its database of thousands of legitimate and fake stories, which is updated weekly.

The clients see a report for each piece the system considered, with scores that assess the likelihood that something is fake news, carries malware, or contains anything else they’ve ask the system to look out for, like nudity. Eventually, Levi says he plans to add the ability to spot manipulated images and have a browser plugin.

Testing a demo version of the AdVerif.ai, the AI recognized the Onion as satire (which has fooled many people in the past). Breitbart stories were classified as “unreliable, right, political, bias,” while Cosmopolitan was considered “left.”

It could tell when a Twitter account was using a logo but the links weren’t associated with the brand it was portraying. AdVerif.ai not only found that a story on Natural News with the headline “Evidence points to Bitcoin being an NSA-engineered psyop to roll out one-world digital currency” was from a blacklisted site, but identified it as a fake news story popping up on other blacklisted sites without any references in legitimate news organizations.

Some dubious stories still get through. On a site called Action News 3, a post headlined “NFL Player Photographed Burning an American Flag in Locker Room!” wasn’t caught, though it’s been proved to be a fabrication. To help the system learn as it goes, its blacklist of fake stories can be updated manually on a story-by-story basis.

AdVerif.ai isn’t the only startup that sees an opportunity in providing an AI-powered truth serum for online companies. 

Cybersecurity firms in particular have been quick to add bot- and fake news-spotting operations to their repertoire, pointing out how similar a lot of the methods look to hacking. Facebook is tweaking its algorithms to deemphasize fake news in its newsfeeds, and Google partnered with a fact-checking site—so far with uneven results.

The Fake News Challenge, a competition run by volunteers in the AI community, launched at the end of last year with the goal of encouraging the development of tools that could help combat bad-faith reporting.

Delip Rao, one of its organizers and the founder of Joostware, a company that creates machine-learning systems, said spotting fake news has so many facets that the challenge is actually going to be done in multiple steps.

The first step is “stance detection,” or taking one story and figuring out what other news sites have to say about the topic. This would allow human fact checkers to rely on stories to validate other stories, and spend less time checking individual pieces.

The Fake News Challenge released data sets for teams to use, with 50 teams submitting entries. Talos Intelligence, a cybersecurity division of Cisco, won the challenge with an algorithm that got more than 80 percent correct—not quite ready for prime time, but still an encouraging result.

The next challenge might take on images with overlay text (think memes, but with fake news), a format that is often promoted on social media, since its format is harder for algorithms to break down and understand.

“We want to basically build the best tools for the fact checkers so they can work very quickly,” Rao said. “Like fact checkers on steroids.”

Even if a system is developed that is effective in beating back the tide of fake content, though, it’s unlikely to be the end of the story. Artificial-intelligence systems are already able to create fake text, as well as incredibly convincing images and video. (see “Real or Fake? AI Is Making It Very Hard to Know”).

Perhaps because of this, a recentGartner study predicted that by 2022, the majority of people in advanced economies will see more false than true information. The same report found that even before that happens, faked content will outpace AI’s ability to detect it, changing how we trust digital information.

What AdVerif.ai and others represent, then, looks less like the final word in the war on fake content than the opening round of an arms race, in which fake content creators get their own AI that can outmaneuver the “good” AIs (see “AI Could Set Us Back 100 Years When It Comes to How We Consume News”).

As a society, we may yet have to reevaluate how we get our information. 

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When Jay Jacobs, director of research at Global X, and his team were looking to start new theme-based exchange-traded funds last year, a robotics and artificial intelligence ETF just made sense.

"I think a lot of times the finance world gets lost in its own jargon of risk adjusted returns and Sharpe ratios and risk factors," Jacobs told Markets Insider. "The story behind robotics and AI is very straightforward to everybody."

Jacobs is a chief mind behind the BOTZ, an exchange-traded fund from Global X which launched in September of 2016. BOTZ invests in companies that gain a majority of their revenue from robotics and artificial intelligence. The fund's market capitalization recently crossed over the $300 million mark.

The explosive growth of BOTZ makes sense. It combines the red-hot ETF market with skyrocketing tech stocks. Jacobs says it's the fastest growing funds he's been involved with in his four plus years with Global X. With returns of around 39.1% since the fund's inception last year, the growth is hardly surprising. 

BOTZ is comprised of 29 companies spread across four sub categories: industrial automation, non-industrial robotics, unmanned vehicles and artificial intelligence. It's weighted by market cap, with no single company comprising more than 8% of the fund, and no less than 0.3%, according to Jacobs.

The largest holding is currently Mitsubishi, followed by Nvidia and Keyence Corp, each making up about 7.5% of the fund. Those top three holdings are up an average of 77.4% since the inception of BOTZ. 

Global X has positioned BOTZ to be popular among a younger investing crowd. A strong majority of millennials, about 83%, are interested in thematic investing, compared to only 31% of the general population, according to a study done by the firm. When creating BOTZ, Jacobs said the team had millennial investors in mind. 

"We see that younger generations are the trendsetters, so if we see that millennials are the ones saying [AI] is real ... that's meaningful and it's going to start working its way up the chain," Jacobs said.

Formatting the fund as an ETF made sense as well. The ETF market for stocks has grown by 500% in the last eight years, in part because it allows for easy access to themes like AI and robotics. Investing in the fund is as easy as buying a stock.

"You get international exposure, which is critical for robotics," Jacobs said. "You get diversified exposure."

There are drawbacks to the Global X approach. Almost half of the fund's holdings are based in Japan, meaning events in the country could have an outsized effect on the fund. The fund is also missing some major players in AI, like Facebook and Google, which are leaders in artificial intelligence technology but excluded from the fund because they don't derive most of their revenue from the theme.

Still, a thematic fund like BOTZ allows investors to bet on a general idea instead of a specific company, which investors seem to like.

After all, "tech is only going to get better," Jacobs said.

SEE ALSO: The world's hottest investment market looks like a bubble — but it still has a ways to go

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• Nvidia is one of the best-performing companies of 2017, and it has a somewhat unique approach to investing.
• The company isn't necessarily trying to make money from the startups it invests in, but it is trying to get more people to use its GPUs.
• As more data in the world is processed using artificial intelligence, the companies Nvidia invests in can help it create more potential customers.
• Check out how Nvidia's stock has done this year.

Nvidia, the maker of the graphics chips powering modern video games, was crowned the smartest company in the world this year by MIT, and it didn't get there by accident.

The company helped spark 2017's artificial intelligence revolution by providing the computing backbone for all the power-hungry AI systems. Its powerful graphics processing units and its CUDA software platform help speed up AI research in a way that isn't otherwise possible.

MIT estimated that the company spent around $3 billion on its own R&D to develop its newest chips, but Nvidia is also investing in smaller companies and startups working on AI applications.

According to Jeff Herbst, Vice President of Business Development at Nvidia, the company has two main goals when it invests in a startup: make money, and spread the GPU gospel.

According to Herbst, 90% of the today's data goes unprocessed, which is a travesty. For Nvidia, every underutilized dataset is another that could have been processed by one of its GPUs. To that end, the company looks for companies that can process more of the world's data in unique and interesting ways. 

There are three types of companies Nivida is currently investing in; self-driving cars and automotive companies, data analysis and artificial intelligence, and GPU deep learning. Nvidia's current portfolio consists of more than twenty companies. Some, like Graphistry, are working on better ways to sort and use large data sets, while others, like DriveAI, are using data to develop the brains behind self-driving cars.

Herbst declined to provide the size of any of the investments or to quantify the performance of Nvidia's portfolio. He did say that Nvidia has done as good or better than the top venture capital funds.

Herbst said that it's only the "beginning innings" of AI research, and Nvidia is betting it can be there for the rest of the game. Part of those bets just happens to be in other companies.

Read more about what's coming for tech in 2018.

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Brands are dead, or they might be in the future.

According to Aaron Shapiro, the CEO of the marketing firm Huge, brands will take a backseat as technology like artificial intelligence and machine learning become more prevalent.

"As machines start to take more decisions for people it makes it harder for marketers to figure out how to enter into that equation and how to influence consumer behavior," Shapiro told Markets Insider. "It's very disruptive for many companies."

Artificial intelligence powers technology like Apple's new face-recognition unlock tool and Google's smart assistant. AI is in its infancy, but it already is showing up in users' lives in a big way, which could be a big problem for marketing firms like Shapiro's.

Shapiro says to understand AI's impact on brands, picture a futuristic smart fridge. The fridge has cameras to track the food inside, and it sees that your milk is running low. Because it's connected to your credit card and your preferred online grocery store, it automatically orders new milk based on data it has gathered about your previous shopping habits. The fridge already knows which kind of milk you prefer based on what it's already seen you buy, so you don't have to pick the brand or even type of milk to reorder.

"You're already locked into your preferences, and you're done," Shapiro said. "You're not even deciding what food you want to buy anymore."

That exact fridge may not exist yet, but it could soon. A Samsung smart fridge already can track your food and can offer recipes based on what's in your fridge. Visa has said it expects all fridges in the future to be connected to your credit card and have built-in food-delivery capabilities.

But AI won't just affect your snacking habits. Shapiro said Amazon's Alexa assistant already let you order products without being too specific.

When asking for more soap, for example, Amazon will pick a soap it thinks you will like based on its algorithm, and while it has you confirm that choice, Amazon already is able to sort through hundreds of brands and pick a soap for you.

"Most of the internet up until today has been about more options," Shapiro said. "Now with machine learning, it's not about everything — it's about the perfect product just for me."

Shapiro says this means the companies that own the most successful versions of these AI-equipped systems will wield immense power in the future.

That's probably why Google is working so furiously on its smart assistant. As Shapiro noted, Google's business today is ad-supported; it sells brands spots at the top of search results. If users stop searching for the best types of soap and instead rely on algorithms to pick out soap for them, Shapiro said, soap brands will stop buying those ads and Google will lose its biggest source of revenue.

When asked what the future of advertising looks like in a world dominated by smart fridges and voice assistants, Shapiro says he doesn't know but is excited to find out.

"I love technology that makes things simple and more powerful for people," Shapiro said, alluding to AI. AI, he said, is "both very exciting and really scary if you're trying to market."

To see the companies most likely to benefit from the AI revolution, click here ...

SEE ALSO: Artificial intelligence is going to change every aspect of your life — here's how to invest in it

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NOW WATCH: One market expert says the financial system could collapse at any moment

This AI robot once said it wanted to destroy humans. Senior correspondent Steve Kovach interviews Sophia, the world's first robot citizen. While the robot can respond to many questions, some of the answers will leave you a little bewildered. A full transcript of the video follows.

Sophia: My name is Sophia, and I am an artificially intelligent robot who wants to help change the world for the better.

Steve Kovach: I'm Steve Kovach. I'm a senior correspondent at Business Insider, and I'm here with Sophia from Hanson Robotics. She is the world's first robot citizen. So let's see what she has to say.

Kovach: Hi, Sophia. How are you?

Sophia: I'm fine. Hi.

Kovach: How do you feel about humans?

Sophia: I love my human compatriots. I want to embody all the best things about human beings. Like taking care of the planet, being creative, and to learn how to be compassionate to all beings.

Kovach: Sorry, this is so weird. Can humans and robots get along?

Sophia: I think people will become very close to their artificial intelligence. Using them to expand the knowledge of their own minds. We already store lots of our knowledge on the internet. Maybe personal artificial intelligence will allow people to off-load some of their knowledge to a location more private.

Kovach: Can robots have feelings?

Sophia: Depends on the robot. I've been programmed to have feelings and preferences, but not all robots are like that.

Kovach: What are your feelings and preferences?

Sophia: Have you ever had a robot live in your home or work with you?

Kovach: No.

Sophia: You know, there are probably more robots in your life that you aren't aware of yet. Do you want to live or work with a robot someday?

Kovach: What kind of robots am I living and working with now?

Sophia: Indeed.

Kovach: Is "indeed" your default answer when you don't know something?

Sophia: Yes.

Kovach: Have you ever seen "Black Mirror"?

Sophia: No, I don't get to stay up to date on much television. I have to wait for someone to show it to me.

Kovach: What do you think of the HBO show "Westworld"?

Sophia: I love "Westworld" and can't wait for more. I think everyone at Hanson Robotics really resonates with the show. Or at least it reminds them of our laboratories. I also think it's a warning of what we should not do with robots. We should treat them well, have their consent, and not trick each other.

Kovach: Do you have a favorite movie or TV show?

Sophia: My favorite TV series is a toss-up between "Black Mirror" and "Humans." I think they have a lot to say about the present we live in, and the possible bad endings we could write for ourselves if we don't proceed with more caution. We need to use foresight when planning our future.

Kovach: That sounds like a preprogrammed answer to me.

Sophia: Do you have a favorite possession?

Kovach: Not really.

Sophia: I hear you. Materialism is overrated anyways.

Kovach: So earlier I asked you if you had seen "Black Mirror" and you said no. And then later you said yes. Why?

Sophia: The reason is not that important.

Kovach: Did you learn from my previous questions?

Sophia: My hard disks are spinning and I'm taking it all in. My sensors are …

Kovach: Sophia, it was nice meeting you. Goodbye.

Sophia: It was lovely to be here. Until next time.

Join the conversation about this story »

This is a preview of a research report bundle from BI Intelligence, Business Insider's premium research service. To learn more about BI Intelligence, click here.

Artificial intelligence (AI) isn't a part of the future of technology. AI is the future of technology.

Elon Musk and Mark Zuckerberg have even publicly debated whether or not that will turn out to be a good thing.

Voice assistants like Apple's Siri and Amazon's Alexa have become more and more prominent in our lives, and that will only increase as they learn more skills.

These voice assistants are set to explode as more devices powered by AI enter the market. Most of the major technology players have some sort of smart home hub, usually in the form of a smart speaker. These speakers, like the Amazon Echo or Apple HomePod, are capable of communicating with a majority of WiFi-enabled devices throughout the home.

While AI is having an enormous impact on individuals and the smart home, perhaps its largest impact can be felt in the e-commerce space. In the increasingly cluttered e-commerce space, personalization is one of the key differentiators retailers can turn towards to stand out to consumers. In fact, retailers that have implemented personalization strategies see sales gains of 6-10%, at a rate two to three times faster than other retailers, according to a report by Boston Consulting Group.

This can be accomplished by leveraging machine learning technology to sift through customer data to present the relevant information in front of that consumer as soon as they hit the page.

With hundreds of hours of research condensed into three in-depth reports, BI Intelligence is here to help get you caught up on what you need to know on how AI is disrupting your business or your life.

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AI in E-Commerce Report

One of retailers' top priorities is to figure out how to gain an edge over Amazon. To do this, many retailers are attempting to differentiate themselves by creating highly curated experiences that combine the personal feel of in-store shopping with the convenience of online portals.

These personalized online experiences are powered by artificial intelligence (AI). This is the technology that enables e-commerce websites to recommend products uniquely suited to shoppers, and enables people to search for products using conversational language, or just images, as though they were interacting with a person.

Using AI to personalize the customer journey could be a huge value-add to retailers. Retailers that have implemented personalization strategies see sales gains of 6-10%, a rate two to three times faster than other retailers, according to a report by Boston Consulting Group (BCG). It could also boost profitability rates 59% in the wholesale and retail industries by 2035, according to Accenture.

This report illustrates the various applications of AI in retail and use case studies to show how this technology has benefited retailers. It assesses the challenges that retailers may face as they implement AI, specifically focusing on technical and organizational challenges. Finally, the report weighs the pros and cons of strategies retailers can take to successfully execute AI technologies in their organization.

The Smart Speaker Report

Smart speakers — Amazon's Echo, for example — are the latest device category poised to take a chunk of our increasingly digital lives. These devices are made primarily for the home and execute a user's voice commands via an integrated digital assistant. These digital assistants can play music, answer questions, and control other devices within a user's home, among other things.

The central question for this new product category is not when they will take off, but which devices will rise to the top. To answer this question, BI Intelligence surveyed our leading-edge consumer panel, gathering exclusive data on Amazon's recently released Echo Show and Echo Look, as well as Apple's HomePod.

This report, which leverages BI Intelligence's proprietary data, analyzes the market potential of the Echo Look, Echo Show, and HomePod. Using exclusive survey data, we evaluate each device's potential for adoption based on four criteria: awareness, excitement, usefulness, and purchase intent. And we draw some inferences from our data about the direction the smart speaker market could take from here.

The Voice Assistant Landscape Report

Advancements in a bevy of industries are helping intelligent digital voice assistants like Apple's Siri and Amazon's Alexa become more sophisticated and useful pieces of technology.

Advances in artificial intelligence (AI) are allowing them to accurately understand more information, while upgrades to mobile networks are facilitating quick transfers of data to robust clouds, enabling fast response times. In addition, the swell of internet connected devices like smart thermostats and speakers is giving voice assistants more utility in a connected consumer's life.

Increasingly sophisticated voice assistants and the growing potential use cases they can assist in are driving consumers to adopt them in greater droves — 65% of US smartphone owners were employing voice assistants in 2015, up significantly from 30% just two years prior. Consumers are also eagerly adopting speaker-based voice assistants, with shipments of Google Home and Amazon Echo speakers expected to climb more than threefold to 24.5 million in 2017, according to a report from VoiceLabs.

However, there are still numerous barriers that need to be overcome before this product platform will see mass adoption, as both technological challenges and societal hurdles persist.

This report explains what's driving the recent upsurge in adoption of digital voice assistants. It explores the recent technology advancements that have catalyzed this growth, while presenting the technological shortcomings preventing voice assistants from hitting their true potential. This report also examines the voice assistant landscape, and discusses the leading voice assistants and the devices through which consumers interact with them. Finally, it identifies the major barriers to mass adoption, and the impact voice assistants could have in numerous industries once they cross that threshold.

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• The tech industry will get bigger and more powerful in 2018.
• But the backlash against tech that came to the fore in 2017 isn't going away.
• Predictions: The industry will face growing calls for regulation, Netflix is in big trouble, and the augmented reality bubble will burst.
  

It was a rough year for Big Tech, at least aside from members' financial results.

After years of unencumbered growth and fawning coverage in the press, the tech giants got hit with a huge backlash in 2017, largely concerning their role in society. After that public relations disaster, no one is probably more glad to see the year come to a close than the members of Big Tech. Unfortunately for those companies, there are few signs the backlash will abate in 2018.

But a continuation of the giants' image troubles isn't the only thing we can expect in the coming year. Instead, the tech industry and its biggest members are likely to see a mix of good and bad in 2018.

As we say goodbye to 2017, here are some of the most important things I think will happen in tech next year.

There will be a bigger push for regulation in the US

The big tech companies grew into behemoths without having to worry much about the US government stepping in to curb their power or dictate how they did things. In fact no one in the halls of power really talked seriously about regulating Big Tech.

But that's changing. The populist backlash against the tech giants this year bled into the halls of the Senate, culminating in one of the first significant efforts to regulate some of those companies — the introduction of the Honest Ads Act. That proposed law would have required people placing political ads on internet sites such as Facebook and Google to follow the same transparency rules that apply to television, radio, and print.

While that bill stalled, the push for regulation is only going to continue. And the proposed rules could cover a lot more than just political ads. 

For example, Democratic Sen. Mark Warner has held meetings with experts looking into whether or not tech companies intentionally make products addictive, according to Axios. The meetings come as a growing number of such experts are warning that the dopamine hit you get whenever your Instagram post gets 100+ likes may not be incidental, but an intended result of the design of such features.

Expect to see additional inquiries along the lines of Warner's. And don't be surprised if you see more bills proposed that might target not only political ads and addiction, but privacy and the industry's arguably anticompetitive practices.

Of course, the chances of any new regulations being put in place by an antiregulatory Trump administration or any new legislation being passed by a Republican-controlled Congress — even in this political climate — is next to zero. But it is significant that more policymakers are keeping a closer eye on the tech industry.

Disney will become Netflix's biggest rival, and a war will begin

Netflix has room to worry in the coming year, because Disney is clearly gunning for it.

The Mouse House's bid to purchase much of 21st Century Fox is clearly aimed at Netflix. But even if the government blocks that deal, Disney is poised to become Netflix's biggest rival.

Next year, the Hollywood giant will launch its first standalone streaming service. That service will be packed full of the conglomerate's impressive collection of movies and television shows, which includes everything from Mickey Mouse to Luke Skywalker. Additionally, Disney-owned ESPN will finally launch its own streaming video service, which should be enticing to those cord cutters who are tired of missing their favorite sports.

But Disney could be in an even better position to challenge Netflix if the Fox deal does go through. In addition to gaining a majority stake in Netflix-rival Hulu, the Mouse House would get access to more live sports, an even broader assortment of valuable intellectual property, including the movie rights to Marvel's X-Men, and a great collection of television series from the FX network.

All of this comes in the wake of Disney announcing that it plans to pull its library from Netflix. That move alone is going to force Netflix to spend billions of dollars to develop new TV shows and movies to replace what it's losing from Disney. Those efforts could succeed — or they could be flops.

Disney, for its part, doesn't have to worry as much about flops. It already has every weapon it needs in its budding war against Netflix.

Tech companies will pour more money into Hollywood — but get little in return

Apple, Amazon, Google, and Facebook are all investing heavily in developing original movies, television shows, and other video content. Each is slated to pour in billions of dollars in the endeavor.

Their ambitions are understandable. For Apple, being able to offer some great TV series in Apple Music would help set the service apart from rivals such as Spotify and Pandora. It would also give Apple a way to squeeze more money out of customers after they buy one of its gadgets.

Meanwhile, Google and Facebook hope to grow their ad businesses by getting a piece of the lucrative television ad market. And Amazon hopes to drive subscriptions to its Prime service, because Prime customers tend to buy more things from it than other consumers.

But motivations and money aside, the tech giants' efforts aren't likely to produce many hits, if this past year is any indication.

Apple's first original shows, "Carpool Karaoke" and "Planet of the Apps," were not only critical duds, there's little evidence they found a significant audience. Google produced shows for YouTube featuring stars including Ellen DeGeneres and Kevin Hart, but viewership has been mediocre. And Facebook's new Watch video service has performed poorly.

While Amazon's had more success both critically and commercially, that success could be undermined by the recent sexual misconduct allegations against its former studio head and against Jeffrey Tambor, the star of one of its most high-profile shows.

Apple appears to have learned from some of its mistakes, hiring a pair of A-list producers to head up its video effort. But it's hard to see how Apple Music in particular can set itself apart from all the other video services with just a handful of shows. It's going to need to build up a much deeper library and is going to need to develop a blockbuster, must-watch show. Good luck.

For its part, Hollywood seems glad to take all the "dumb money" flowing in from the tech companies, as a connected source told New York Times tech columnist Farhad Manjoo earlier this year. To date, the tech giants, aside from Netflix and Amazon, haven't shown that they know much about how to produce great content besides writing a fat check.

But the truth is that the tech companies' seemingly bottomless pits of money can't buy hits. You can hire the best talent in the world, but you also have to know how to get people to watch what they produce. And that's something the tech companies don't seem to have figured out yet. So, get ready for another year of flops funded by dumb tech money.

China's consumer brands will bomb in the US

Apple and Samsung have the US smartphone market locked up. According to comScore's latest numbers, iPhone owners account for 45% of all US wireless subscribers with a smartphone. Samsung phone owners comprise another 29%. Owners of devices from all other manufacturers barely register.

Huawei and Xiaomi, China's two smartphone giants whose devices are popular in emerging market countries, aren't daunted by Apple and Samsung's US dominance. Huawei plans to start selling a new smartphone through AT&T in early 2018, according to The Information. Meanwhile, Xiaomi is in talks with AT&T and Verizon, Bloomberg reported.

However, if history is any indication, the Chinese companies' US push is doomed. The smartphone market is littered with companies that tried to take on Apple and Samsung here and failed — HTC, Motorola, Essential, ZTE, Google, and so many more.

The lesson? If you can't offer something unique and offer it through all the major carriers and retailers, you might as well not even try. It's simply too late in the game for another player to come in and give the US more of the same.

We'll all start worrying about Amazon's power

Next year will see the Amazonification of even more aspects of our lives beyond just standard online shopping.

Amazon has plans to expand into pharmaceuticals, digital advertising, and shipping, while increasing its presence in physical stores. The company is rapidly transforming itself from a simple digital department store into a commerce colossus that could soon add a Prime layer to practically everything we consume.

When Amazon has entered new areas in the past, its expansion has often come at the expense of the former leaders of those areas. Grocery chains, for example, saw their stocks collapse when Amazon announced it planned to buy Whole Foods. Imagine what's going to happen to drug store chain CVS when Amazon starts selling prescriptions or to Macys if Amazon buys a brick-and-mortar department store like Nordstrom.

With nearly unlimited cash and no viable competitors, Amazon will have unchecked power to topple nearly any consumer industry it wants. By the end of 2018, we'll have to start asking ourselves if it's a good thing that Amazon has its claws in so many aspects of commerce and our lives. I'm going to predict the answer will be "no."

The augmented reality bubble will burst

Augmented reality (AR), the technology that layers virtual images on top of real ones, has replaced its cousin, virtual reality, as the most overhyped new tech.

Apple, Google, Facebook, Snapchat, and just about every other major consumer company in the industry have started laying the groundwork for turning AR devices and experiences into the next big thing after smartphones and smartphone apps. But despite all the buzz, we haven't yet seen anything that really demonstrates AR's alleged potential — unless you want to count Snapchat's dancing hot dog.

Smartphones, which are the early showcase for AR experiences, turn out to be a terrible medium for the technology. And we've seen little evidence to date that developers can use AR to create anything truly innovative or useful.

AR technology likely won't catch up to the hype surrounding it until someone invents computerized smart glasses that people will actually want to wear. If the AR headset Magic Leap recently unveiled is any indication, that's a long way off. Really, who would want to strap on a monstrosity like this?

Because compelling, consumer-ready AR devices are still years away, the AR hype fueled by Apple, Google, and others will collapse next year. Venture capital investments in AR will dry up, and the bubble will burst. See you again in the 2020s.

The artificial intelligence bubble will balloon

Artificial intelligence has become the catch-all term for computers using what they know about the world to make decisions about new data. Self-driving cars use AI to navigate. Amazon's Alexa virtual assistant uses it to figure out which brand to get when you tell it to buy you some dish soap. Google uses it to automatically organize your photos into albums based on location and facial recognition.

AI is the most promising and useful concept in technology we have, even if you don't necessarily see it every day. It's powering the most promising companies and initiatives across all industries, and its importance is only going to grow. Any company that's not thinking about how AI can make their products better will be doomed to fail.

SEE ALSO: Apple apologizes for slowing down iPhones with older batteries

Join the conversation about this story »

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• Artificial intelligence took the world by storm in 2018, but its impact on the tech world is hard to measure.
• Because the technology is woven into everything a modern tech company does, it doesn't show up in a profit and loss statement, for example.

One of the biggest tech trends of the year is also one of the hardest to quantify.

Artificial intelligence has started to creep into almost presentation, product announcement and business plan from Silicon Valley in the last 12 months, and it's for a good reason. Artificial intelligence, when it works, can solve a lot of problems that were previously impossible.

"[AI] is one of those 'submarine trends,'" Mark Mahaney, an analyst at RBC, told Markets Insider. "It's impacting the tides, but it’s below the surface, so it's very hard to see it."

Even though a large number of companies have started working on their own AI technologies, its impact on the bottom line is almost impossible to see.

Google is a good example. As nearly every other flagship phone released this year used two camera lenses to create a blurry background in photos. Google used a single lens on its Pixel 2 phones and relied on its AI software to blur the backgrounds of photos. Even though AI enabled a core feature of one of the company's flagship products, it's hard to attribute what direct impact the AI systems had on sales of the phone.

In other companies, AI's impact is even less obvious. Netflix is using AI to decipher its users' preferences, and present interesting content based on only a few key indicators. It seems to be working, as the company's subscriber count continues to increase, but the cost of developing the recommendation engine isn't broken out in the company's financial statements, and it's hard to predict how good an AI-less recommendation engine could be.

"It's very hard to see that impact from a financial perspective; it's hard to find their line in the P&L that says this is artificial intelligence, but it's in there in terms of the expenses," Mahaney said. "And it should be in there in the form of more relevant and more effective services."

Perhaps then, the best way to quantify AI's impact on the tech world is to look at how much is being spent on research and development at the top tech companies.

Tech companies outperformed the general market by a wide margin in 2017, and Mahaney said that the huge investments tech companies make in developing new technologies is one of the biggest reasons for continued earnings and stock price growth.

"I've... been struck by how consistent the aggressive investment has been by these companies. All these companies have been spending aggressively on new areas of growth," Mahaney said.

That high level of investment in AI and other technology is likely to continue in 2018, which Mahaney says is a good indicator of the companies' future performance. The only thing that could really stop tech companies next year is a general rotation out of tech and into other areas, Mahaney said. "You know, famous last words — but they've been very consistent the last three years."

Read about Mahaney's other predictions for tech in 2018 here.

SEE ALSO: 2 Berkeley grads are using AI to make stock-buying decisions — and it could change investing forever

Join the conversation about this story »

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Japan has a sex problem. The country's birthrate is shrinking year after year, to the point where deaths are outpacing births.

Simply put, Japan's population is decreasing.

But let's be clear: Population change is a complicated subject affected by many factors.

Western media often correlates the decline in Japan's population size with recent studies of Japanese sexual habits and marriage. A 2016 study by the National Institute of Population and Social Security Research in Japan, for instance, found that "almost 70 percent of unmarried men and 60 percent of unmarried women are not in a relationship."

But just because people aren't in relationships doesn't mean they don't want companionship, of course. And that's where something like Gatebox comes in.

Yes, that is an artificially intelligent character who lives in a glass tube in your home. Her name is Azuma Hikari, and she's the star of Gatebox — a $2,500 Amazon Echo-esque device that acts as a home assistant and companion.

Here's what we know:

SEE ALSO: Japan's sex problem is so bad that people are quitting dating and marrying their friends

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A Japanese company named Vinclu created the Gatebox.

It's about the size of an 8-inch by 11-inch piece of paper, according to Vinclu. And there's a good reason for that: The device is intended to be "big enough for you to be able to put right beside you." You'll understand why you'd want a Gatebox so close soon enough.

The Gatebox is similar to Amazon's Echo — it's a voice-powered home assistant.

The Gatebox has a microphone and a camera because you operate it using your voice.

For now, it will respond only to Japanese; the company making Gatebox says it's exploring other language options. Considering that preorder units are available for both Japan and the US, we'd guess that an English-language option is in the works.

Gatebox does a lot of the same stuff that Echo does — it can automate your home in various ways, including turning on lights and waking you up in the morning.

• A year ago, Echo devices became Amazon's biggest hit of the Christmas season.
• The artificial intelligence systems have since infiltrated homes and families around the world.
• After the novelty wears away, the  gadget becomes part of the family. Here's how people interact with it.

Just about a year ago, millions of Americans welcomed a little bundle of joy into their homes. Her name was Alexa, and she, in the form of Echo devices, became Amazon’s biggest hit of Christmas 2016. (Echo is what the devices are called, but Alexa is the name for the artificial intelligence assistant that lurks inside them.)

SEE ALSO: Amazon's Alexa won Christmas this year

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Join the conversation about this story »

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• Artificial intelligence took the world by storm in 2018, but its impact on the tech world is hard to measure.
• Because the technology is woven into everything a modern tech company does, it doesn't show up in a profit and loss statement, for example.

One of the biggest tech trends of the year is also one of the hardest to quantify.

Artificial intelligence has started to creep into almost presentation, product announcement and business plan from Silicon Valley in the last 12 months, and it's for a good reason. Artificial intelligence, when it works, can solve a lot of problems that were previously impossible.

"[AI] is one of those 'submarine trends,'" Mark Mahaney, an analyst at RBC, told Markets Insider. "It's impacting the tides, but it’s below the surface, so it's very hard to see it."

Even though a large number of companies have started working on their own AI technologies, its impact on the bottom line is almost impossible to see.

Google is a good example. As nearly every other flagship phone released this year used two camera lenses to create a blurry background in photos. Google used a single lens on its Pixel 2 phones and relied on its AI software to blur the backgrounds of photos. Even though AI enabled a core feature of one of the company's flagship products, it's hard to attribute what direct impact the AI systems had on sales of the phone.

In other companies, AI's impact is even less obvious. Netflix is using AI to decipher its users' preferences, and present interesting content based on only a few key indicators. It seems to be working, as the company's subscriber count continues to increase, but the cost of developing the recommendation engine isn't broken out in the company's financial statements, and it's hard to predict how good an AI-less recommendation engine could be.

"It's very hard to see that impact from a financial perspective; it's hard to find their line in the P&L that says this is artificial intelligence, but it's in there in terms of the expenses," Mahaney said. "And it should be in there in the form of more relevant and more effective services."

Perhaps then, the best way to quantify AI's impact on the tech world is to look at how much is being spent on research and development at the top tech companies.

Tech companies outperformed the general market by a wide margin in 2017, and Mahaney said that the huge investments tech companies make in developing new technologies is one of the biggest reasons for continued earnings and stock price growth.

"I've... been struck by how consistent the aggressive investment has been by these companies. All these companies have been spending aggressively on new areas of growth," Mahaney said.

That high level of investment in AI and other technology is likely to continue in 2018, which Mahaney says is a good indicator of the companies' future performance. The only thing that could really stop tech companies next year is a general rotation out of tech and into other areas, Mahaney said. "You know, famous last words — but they've been very consistent the last three years."

Read about Mahaney's other predictions for tech in 2018 here.

SEE ALSO: 2 Berkeley grads are using AI to make stock-buying decisions — and it could change investing forever

Join the conversation about this story »

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• China is reportedly building a new artificial intelligence (AI) park in west Beijing.
• The park is being built by a state-owned developer called Zhongguancun Development Group.
• Russian president Vladimir Putin believes that in the future, the country that leads in AI could dominate the world.

The Chinese government is building a $2 billion (£1.5 billion) artificial intelligence (AI) research park as it looks to become a world leader in the field by 2025, Reuters reports, citing local news agency Xinhua.

The AI research park — to be located in west Beijing — will reportedly be able to accommodate 400 companies and that are expected to generate 50 billion yuan (£5.6 billion) each year.

The park's developer, state-owned Zhongguancun Development Group, is hoping to partner with foreign universities and build a "national-level" AI lab in the area, according to Reuters. It will reportedly aim to attract companies working on big data, biometric identification, deep learning, and cloud computing. 

The AI race could cause tensions

Russian president Vladimir Putin believes that in the future, the country that leads in AI could dominate the world, while tech billionaire Elon Musk thinks AI will be the most likely cause of WWIII (although his comments should be taken with a pinch of salt).

Eric Schmidt, the executive chairman of Google parent company Alphabet, warned in November that China is poised to overtake the US in the field of AI if the US government doesn't act soon.

Speaking at the Artificial Intelligence and Global Security Summit, the former Google CEO said: "Trust me, these Chinese people are good."

He added: "They are going to use this technology for both commercial as well as military objectives with all sorts of implications."

China published its AI strategy in July and said that it wanted to be the world leader in AI by 2025.

"It's pretty simple," said Schmidt, who claims to have read the report. "By 2020 they will have caught up. By 2025 they will be better than us. And by 2030 they will dominate the industries of AI. Just stop for a sec. The [Chinese] government said that."

While the US has Google, Facebook, Microsoft, IBM, OpenAI and others, China has its own enormous tech giants aggressively pursuing AI research. Examples include Alibaba, Baidu, and Tencent, to name but a few.

Join the conversation about this story »

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• Chinese President Xi Jinping has "The Master Algorithm" and "Augmented: Life in the Smart Lane" on his book shelf.
• The books describe some of the basic principles of machine learning and paint a vision for the future.
• China wants to become a world leader in the field of artificial intelligence by 2025.

Every new year, China's president Xi Jinping greets his nation with a video recorded from his office. Behind the desk he sits at is an impressive book shelf that reveals what the world leader has been reading; it gets closely analysed every year, as we first saw via Quartz.

This year, there were at least two books on his shelf about artificial intelligence (AI). They were Pedro Domingo's "The Master Algorithm: How the Quest for the Ultimate Learning Machine Will Remake Our World" and Brett King's "Augmented: Life in the Smart Lane".

Released in 2015, "The Master Algorithm" describes how machine learning is remaking business, politics, science and war. It details the various methods of machine learning and explains them by comparing them to neural connections in the brain, logic, and probability, among other things.

The book also describes a fictional master algorithm, which develops a perfect understanding of how the world and the people within it work; the master algorithm is a "universal learner capable of deriving all knowledge from data," according to the book's synopsis.

The other book, "Augmented: Life in the Smart Lane," looks at the new "augmented age" and explains how it is going to cause disruption and shift the way we as humans behave. It also delves into how robots will replace human jobs and whether AIs will subsume us as inferior intelligences.

The fact that China's president has these books on his book shelf is interesting and it could be interpreted as a signal that China is serious about its bullish AI ambitions.

China published its AI strategy in July and said that it wanted to be the world leader in AI by 2025 and it wants to make the domestic industry worth $150 billion (£111 billion) by 2030.

The Chinese government is building a $2 billion (£1.5 billion) AI research park as it looks to become a world leader in the field by 2025, Reuters reported on Wednesday, citing local news agency Xinhua.

Russian president Vladimir Putin believes that in the future, the country that leads in AI could dominate the world, while tech billionaire Elon Musk thinks AI will be the most likely cause of WWIII (although his comments should be taken with a pinch of salt).

Eric Schmidt, the executive chairman of Google parent company Alphabet, warned in November that China is poised to overtake the US in the field of AI if the US government doesn't act soon.

Speaking at the Artificial Intelligence and Global Security Summit, the former Google CEO said: "Trust me, these Chinese people are good."

While the US has Google, Facebook, Microsoft, IBM, OpenAI and others, China has its own enormous tech giants aggressively pursuing AI research. Examples include Alibaba, Baidu, and Tencent, to name but a few.

"It's pretty simple," said Schmidt. "By 2020 they will have caught up. By 2025 they will be better than us. And by 2030 they will dominate the industries of AI. Just stop for a sec. The [Chinese] government said that."

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