First we had computers, then we had mobile phones, and then the cloud. Now we have AI. Artificial Intelligence. AI has been around for 30 years, but is currently growing rapid fire. Rudina Seseri, Founder and Managing Partner for Glasswing Ventures, explains the power of this booming technology.

By definition AI is machine intelligence that uses an algorithm to perform a human-like function, requiring some degree of reason, planning, problem solving, and even creativity, by which a person would need to leverage human intelligence to accomplish.

AI is quite different from traditional software, which offers static features to solve a problem. AI is continually learning and improving over time, much like a human does. All else equal, when comparing “old fashioned” software versus AI software, AI will outperform every single time.

We can look to past technology advancements to understand the importance of AI today. With the emergence of the Internet, we saw a major expansion around digital. Then we saw two technological breakthroughs, the first around cloud computing and the other with mobile. Mobile provided a whole new world of apps, new forms of interaction, and a digital way of doing things, like banking, shopping, and transportation. These technology developments allowed AI adoption to truly manifest. Mobility gives us pervasive connectivity through our watches, homes, and even cars, not to mention computers and phones. All of this combined has caused a literal explosion of data, which is overwhelming. We need ways to structure the data, so we can actually use it. This is where AI comes in.

A trifecta of core drivers makes AI especially relevant:

1. The power of computing continues to grow while the cost of computing goes down.
2. Algorithms create machine “deep learning,” an AI function that imitates the human brain in processing data and creating decision-making patterns, thus making it possible for multiple levels of neural networks to develop into one, at an accelerated and unprecedented pace.
3. Readout, or the output AI provides us by organizing and making sense of data.

AI may be unfamiliar to some, but it is not just a niche part of the technology world. Seresi cites a $3 trillion worldwide impact from AI, which is fundamentally new revenue and opportunities. AI provides unbelievable automation that results in high efficiencies and cost savings. Many industries naturally adopt AI through periods of digital transformation. For example, cybersecurity heavily relies on AI to predict and monitor today’s more sophisticated cyberattacks.

How are investors taking advantage of the rapidly evolving world of AI? AI is a focused investment strategy with huge market opportunity. Because AI is so prevalent, it is likely that if you have exposure to venture capital in your portfolio, you will invariably get some exposure to AI, even if only from general funds. Investing in AI is different than investing in traditional software, because with AI you have to first train the algorithm. As such, the set up may take longer, but once it’s in market AI performance far exceeds that of software.

The Covid-19 era has had an enormous impact on the AI industry. Not only is AI used for cost cutting, improved cybersecurity, and increased productivity, but AI also serves remote learning, remote working, digital healthcare, language and gaming. AI technology and the firms who build it and use it are experiencing unprecedented growth. For every month of this pandemic, AI adoption has accelerated by 1-2 years. Enabling AI for the management and leveraging of data has truly shifted our technology mindset.

Jonathan Tunner is the director of private investment opportunities at FOX. Jonathan serves as a relationship manager and thought leader helping to develop and execute strategies designed to meet the needs of families across all markets active in direct investing. In his role, Jonathan builds and supports the strategic network of families who desire to share their industry expertise and to collaborate with others to acquire interests in companies and/or real estate. In addition, he oversees the Direct Investing Network (DIN), is a member of the FOX leadership team, and is the Co-Chair of the Owner/Operator Council. Read More →