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Lex

FT’S EXCLUSIVE AGENDA SETTING COLUMN ON BUSINESS AND FINANCE

Lex is a premium daily commentary service from the Financial Times. It is the oldest and arguably the most influential business and finance column of its kind in the world. It helps readers make better investment decisions by highlighting key emerging risks and opportunities.

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Best of Lex Midweek: Granite City, hard times for oil

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Artificial intelligence

The billion-dollar bet to reach human-level AI

OpenAI believes that huge computing power is key driver

In the race to build a machine with human-level intelligence, it seems, size really matters.

"We think the most benefits will go to whoever has the biggest computer," said Greg Brockman, chairman and chief technology officer of OpenAI.

The San Francisco-based AI research group, set up four years ago by tech industry luminaries including Elon Musk, Peter Thiel and Reid Hoffman, has just thrown down a challenge to the rest of the AI world.

According to Mr Brockman, that money — a huge amount for a research organisation — will be spent "within five years, and possibly much faster", with the aim of building a system that can run "a human brain-sized [AI] model".

Whether a computer that matches the neural architecture in the human brain would deliver a comparable level of intelligence is another matter. Mr Brockman is wary about predicting precisely when AGI will arrive, and said that it would also require advances in the algorithms to make use of the massive increase in computing power.

But, speaking of the vast computing power that OpenAI and Microsoft hope to put at the service of its AI ambitions within five years, he added: "At that point, I think there’s a chance that will be enough."

Article Image
Greg Brockman, left, with co-founder Ilya Sutskever at the OpenAI offices © Handout

OpenAI’s huge bet points to a parting of the ways in the artificial intelligence world after a period of rapid advance. Deep learning systems, which use artificial neural networks modelled on one idea of how the human brain works, have provided most of the breakthroughs that have put AI back at the centre of the tech world. OpenAI argues that, with enough computing power behind them, there is a good chance that these networks will evolve further, right up to the level of human intelligence.

But many AI researchers believe that deep learning on its own will never become much more than a form of sophisticated pattern-recognition — perfect for facial recognition or language translation, but far short of true intelligence.

To reach the next level of AI, we need some breakthroughs. I’m not sure it’s simply throwing more money at the problem

Oren Etzioni, Allen Institute for Artificial Intelligence

Some of the most ambitious research groups — including DeepMind, the British AI research company owned by Alphabet — believe that teaching computers new types of reasoning and symbolic logic will be needed to complement the neural networks, rather than just building bigger computers.

“If we allocated $100m for compute, what could we do? We’re thinking about it, and you can imagine other people are thinking about it as well,” said Oren Etzioni, the head of Allen Institute for Artificial Intelligence, one of the best-funded American AI research groups. But he added: “To reach the next level of AI, we need some breakthroughs. I’m not sure it’s simply throwing more money at the problem.”

Others are more forthright. Asked whether bigger computers alone will deliver human-level AI, Stuart Russell, a computer science professor at the University of California, Berkeley, points to the verdict in his forthcoming book on the subject: “Focusing on raw computing power misses the point entirely . . . We don’t know how to make a machine really intelligent — even if it were the size of the universe.”

Even the possibility that OpenAI may be on the right track, though, has been enough to attract a huge cash injection from the world’s most valuable company, setting up a race to build far more advanced hardware systems for AI.

Mr Brockman calls it “a public benefit Apollo program to build general intelligence”. That reflects the mission set by OpenAI’s founders, to build an AI whose benefits are not limited to one corporation or individual government.

It could also create unmatched wealth. Pointing to the stock market value of today’s leading tech companies, he said: “That’s the value we produce with computers that aren’t very smart. Now imagine we succeed in building the kind of technology we’re talking about, an artificial general intelligence — that company is going to be by a huge margin unprecedented in history, the number one.”

OpenAI’s bet is that, as computer hardware gets more powerful, the learning algorithms used in deep learning systems will evolve, developing capabilities that today’s coders could never hope to program into them directly.

It is a controversial position. Critics like Mr Russell argue that simply throwing more computing power at imperfect algorithms means “you just get the wrong answer more quickly.” Mr Brockman’s response: “You can get qualitatively different outcomes with increased computation.”

He claims that some of the tests carried out by OpenAI in its four-year history hint at the kind of advances that could come from massive increases in hardware.

Two years ago, for instance, the researchers reported the results of a system that read customer reviews on Amazon and then used statistical techniques to predict the next letter. The system went further, according to OpenAI, learning for itself the difference between positive and negative sentiment in the reviews — a level of understanding beyond anything it might have been expected.

A far bigger language system released this year, called GPT-2, went a step further, said Mr Brockman, developing a degree of semantic understanding from applying the same kind of huge statistical analysis.

One of OpenAI’s most recent experiments — an AI system that beat a top human team at the video game Dota 2 — also showed that today’s most advanced AI systems can perform well at games that are far closer to the real world than board games like chess.

That echoed work by DeepMind on playing the game Starcraft. According to Mr Brockman, the OpenAI system taught itself to operate at a higher level of abstraction, setting an overall goal and then “zooming in” on particular tasks as needed — the kind of planning that is seen as a key part of human intelligence.

Even many of the sceptics, who are cautious about OpenAI’s zealous insistence that a single AI technique will be sufficient to replicate human intelligence, seem wary of writing off its claims completely. “It’s fair to say that deep learning has been a paradigm shift [in AI],” said Mr Etzioni. “Can they achieve something like that again?”

Bringing in Microsoft to bankroll the effort represents a change in direction for the research group as it tries to accelerate the move to AGI. Most of the $1bn investment will return to the software company in the form of payments to use its Azure cloud computing platform, with Microsoft working on developing new supercomputing capabilities to throw at the effort.

Mr Brockman denies that this is a deviation from OpenAI’s goal of staying above the corporate fray. Microsoft, he said, would be limited to the role of “investor and a strategic partner in building large-scale supercomputers together”.

The software company’s investment will give it a large minority stake in OpenAI’s for-profit arm, as well as a seat on its board. Like all of the organisation’s equity investors, its potential returns have been capped at a fixed level, which has not been disclosed.

If OpenAI’s work ever produces the kind of huge wealth that Mr Brockman predicts, most of it will flow to the group’s non-profit arm, reflecting its promise to use the fruits of advanced computer intelligence for the benefit of all humanity.

AI curve steeper than Moore’s Law

The tech industry is accustomed to riding the curve of Moore’s Law, which describes the way that computing power roughly doubles every two years. But OpenAI is counting on a much more powerful exponential force to quickly take the capacity of its AI systems to a level that seems almost unimaginable today.

The research group calculates that since the tech industry woke up to the potential of machine learning seven years ago, the amount of processing capacity being applied to training the biggest AI models has been increasing at five times the pace of Moore’s Law.

That makes today’s most advanced systems 300,000 times more powerful than those used in 2012. The advance reflects the amount of money now being poured into advanced AI, as well as the introduction of parallel computing techniques that make it possible to crunch far more data.

Mr Brockman said OpenAI was counting on this exponential trend being carried forward another five years — something that would produce results that, he admits, sound “quite crazy”.

As a comparison, he said that the past seven years of advances would be like extending the battery life of a smartphone from one day to 800 years: another five years on the same exponential curve would take that to 100m years.

Today’s most advanced neural networks are roughly on a par with the honey bee. But with another five years of exponential advances, OpenAI believes it has a shot at matching the human brain.

Special Report: AI & Robotics

EU leads on regulation while China and US forge ahead on technology

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China’s unchecked expansion of data-powered AI raises civic concerns

Local industry is growing fast but there are signs of a pushback

US export controls are no guarantee against China’s AI advances

Budget cuts and immigration curbs risk undermining fight for competitive edge

Japan lays bare the limitations of robots in unpredictable work

Forerunner in automation worried about progress being too slow rather than too fast

EU leads on regulation while China and US forge ahead on technology

Race for innovation blunts efforts to safeguard basic rights

Lessons from Mary Poppins on ethical robots

In the nature-versus-nurture tech debate, we look to the world’s most famous nanny

Start-up makes robots small manufacturers can afford

Collaborative robots market expected to snowball to $12.3bn by 2025

China’s unchecked expansion of data-powered AI raises civic concerns

Local industry is growing fast but there are signs of a pushback

US export controls are no guarantee against China’s AI advances

Budget cuts and immigration curbs risk undermining fight for competitive edge

Japan lays bare the limitations of robots in unpredictable work

Forerunner in automation worried about progress being too slow rather than too fast

Brexit

Brexit: the challenge facing UK Prime Minister Boris Johnson

FT editor Lionel Barber and political commentator Robert Shrimsley on the task faced by the Conservative leader to deliver the UK's split from the European Union and the likelihood of a general election

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Huawei Technologies Co Ltd

Huawei founder predicts internet of things is next US battle

Chinese company aims to corner global market through writing industry’s standards

The founder of Huawei, Ren Zhengfei, has predicted the next battle with the US will be over the Chinese telecom company’s push into the internet of things (IoT) and smart factories.

Huawei has been rapidly developing chips and software for companies to connect their factory floors to the internet, using sensors to automate and monitor manufacturing lines.

China’s manufacturing prowess gives Huawei a huge potential market for this technology, and a chance to set standards that are eventually adopted across the world. The Chinese government estimates that the industrial IoT sector was worth Rmb300bn ($44bn) last year and is growing at about 25 per cent each year.

“They’ll fight IoT next,” said Mr Ren, predicting that the Trump administration would turn its attention to this sector once Huawei emerges as an industry leader. “Let them fight,” he said.

Huawei is aiming to corner the global IoT market through writing the industry’s standards, an increasingly common move for Chinese companies as the country seeks dominance in international standards-setting bodies.

“If everyone were to vote for an IoT standard, they would vote for our standard, because Qualcomm hasn’t done much work in the IoT sphere and we’ve done a huge amount of research,” said Mr Ren.

Although there is no clear industry leader in the nascent market for industrial IoT hardware and platforms, analysts say Huawei offers the deepest range of products.

“From front-end chips to operating systems, networks, border gateways, platform, security and data analysis, Huawei has all-round ability,” said Milly Xiang, an analyst at market research firm Gartner. She added: “Huawei’s very actively contributing to IoT-related standards. But currently no one really has the scale to set de facto standards.”

Huawei hopes its expertise in 5G can translate into dominance of industrial IoT, because high-speed connectivity is a must for transferring bulky data from industrial devices for data analysis. The company holds the largest number of patents essential for global 5G standards.

Unlike 5G wireless internet standards, which have been decided by one major international body, 3GPP, there are several industry associations that are only beginning to set standards in industrial IoT.

The industrial IoT industry is likely to undergo consolidation in the next five years under “key players”, said Alex West, analyst at IHS Markit, although there will not be “one vendor to rule them all”.

“Huawei certainly has a broader offering of IoT technologies than many others, but there is no one company that can offer a complete industrial IoT solution,” said Mr West.

Of the various components of industrial IoT, Huawei has an advantage in networking products, said Ms Xiang.

Outside of China, Huawei’s OceanConnect IoT platform will be competing against cloud providers such as Amazon and Google, while its IoT communication chips are up against those of Qualcomm and Intel. The US is lobbying countries not to use Huawei equipment in their 5G networks and has banned US companies from selling it their technology. At the weekend, US president Donald Trump suggested that some companies may be allowed to export to Huawei as long as the trade did not endanger national security.

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FT Confidential Research

A RESEARCH SERVICE EXCLUSIVELY FROM THE FINANCIAL TIMES

FT Confidential Research provides data-based, analytical insight into China and Southeast Asia. Our experts and researchers combine findings from our proprietary surveys with on-the-ground research to deliver objective, predictive analysis of macro and industry-specific trends.

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