Doctors leveraging AI to pursue vaccines and treatments for the coronavirus. Robots and drones delivering essential items. Warehouses operating almost entirely by machines.
Artificial intelligence has been in the spotlight for years, but the COVID-19 crisis is leading companies to seek out AI solutions in a host of unique ways. Indeed, experts say the pandemic may very well end up being a defining moment for tech start-ups focused on AI, automation, machine learning, and robotics. Peter Cave-Gibbs, senior client partner with Korn Ferry’s Global Technology Markets practice, says despite the financial damage inflicted by the virus, there are still lots of private equity and venture capital funds with significant cash at their disposal to invest.
“The challenge is that there are a lot of AI-related start-ups,” says Cave-Gibbs. “For now, it’s difficult to know which technology will win and which ones to back.”
Venture capital firms invested a record $18.5 billion in more than 1,350 AI-related start-ups in the United States in 2019, according to data from the National Venture Capital Association. At the end of this year’s first quarter, 285 AI-related start-ups raised just under $7 billion. While the outbreak is likely to cut into the pace of investment, Cave-Gibbs says there is still plenty of excitement among investors as to the value potential of AI start-ups. “COVID has taken the froth out of the asset prices to remove some of the risk, but only partially,” he says.
Though delivery, automated distribution, and healthcare will obviously see more investment, there are other aspects of AI that could see more activity as a result of the pandemic, says Antonio Machado, a principal in Korn Ferry’s Global Technology Markets practice. He cites financial technology as one potential area, particularly AI-enhanced financial advisory products. “Right now millions of people are rushing to change investment portfolios or are in need of credit,” he says. “The level and scale is too large for humans alone to handle.”
Another area that could see increased investment is AI that analyzes behavioral patterns for recommendations, says Machado, particularly as it relates to entertainment options. With a portion of the global population under quarantine at some point this year, for instance, it’s no coincidence that Netflix added a record-shattering 16 million new subscribers in the first quarter. Machado expects the battle between entertainment, gaming, and other companies for eyeballs will only intensify. “Media companies are investing a ton of money in AI to help them figure out how to get their content in front of consumers,” he says.
Along with the increased investment attention on AI comes a greater need for talent with understanding of the technology. That includes not only engineers to develop the technology but also lawyers who can sort out regulatory and liability issues and marketers who can create experiences for consumers, among others. Organizations have been anticipating this talent gap for years, retooling learning and development to help transition their existing talent into areas of demand in AI.
Most importantly, says Cave-Gibbs, there is a need for leaders who understand how to use and adopt AI for a specific business context. “Not enough of these executives exist, and competition for them is fierce,” he says.