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January 2017

Hype vs. Reality

The AI Explainer
Produced by Luminary Labs in partnership with Fast Forward Labs

AI and the Near Term
Artificial intelligence (AI) is everywhere, promising self-driving cars,
medical breakthroughs, and new ways of working.

But how do you separate hype from reality? How can your company
apply AI to solve real business problems in 2017?

In September 2016, Luminary Labs convened 30 executives in

healthcare, machine learning, and analytics for a grounded discussion
on these questions with machine learning expert Hilary Mason,
founder and CEO of Fast Forward Labs, and Sandy Allerheiligen, VP
of data science and predictive and economic modeling at Merck.

Heres a synopsis of what we discussed, and what AI learnings your

business should keep in mind for 2017.

The Hype

Weve all seen the sensational headlines: The robots are

coming, and theyll take our jobs! AI can do your job faster
and more accurately than you can!


Human jobs wont go away, but they will change. Roles will
be more creative and specialized as AI is integrated into the
workday. Better data leads to better math leads to better
predictions, so people using AI can automate the tedious
work and take action on the insights. 4
In the short term
AI does the math faster, saving money by automating
normally complex processes.

It makes your life easier even now, behind the scenes.

This is what it looks like today.

The Nest thermostat remembers what temperatures you like
and adjusts automatically, like turning the temperature down
when youre away and turning it up when youre on your way
home. This saves users time, energy, and money.
Photo: Nest 66
Netflixs predictive analytics recommend what you might
want to watch nextand what studios should create next
based on viewer data. Amazon, iTunes, Pandora, and other
companies use predictive analytics to make better
recommendations. Photo: Netflix 77
Salesforce Einstein applies natural language processing to
analyze text from e-mails exchanged with customers to
estimate the likelihood that a user will buy, detect deals a
team is at risk of losing, and recommend actions to improve
sales. 8
In the longer term
AI will transform industries.

For example, algorithms help healthcare professionals
recognize anomalies or patterns in medical images with
more accuracy than the human eye. Over time, this can
result in a library of knowledge that can lead to potential
disease cures. 10
One of AIs promises is to make self-driving cars safer.
Everyday driving decisions, such as whether to stop abruptly
or swerve to avoid hitting an obstacle, will be powered by AI.

Photo: NVIDIA Coporation 11

AI will help redesign the entire shopping experience, optimizing
everything with more and better data. Retailers will seamlessly
stock the precise number of goods needed on shelves at any
given time, and know which product at which price should be
highlighted to a specific customer as they navigate a store.
Where do you start?
Five ways to look past the shiny-object phase and into
practical AI planning in 2017.

1. Dont fear the robots. The idea is to augment, not replace,
work. AI can absorb cognitive drudgery, like turning data points
into visual charts, calculating complex math formulas, or
summarizing the financial news of the day into a single report.
This frees up people to focus on acting on the insights.
Photo: Flickr user joao_trindade 14
2. Start with the problem, not the solution. Before launching an
AI program, identify concrete business problems, then consider if
AI can help. For example, rather than ask, What can we use AI
for?, think, Where could we make our operations more efficient?
or What decisions are we making without data?
Photo: Flickr user Robert Couse-Baker 15
3. Emphasize empathy. The more machines we employ, the
more people skills we need. Leaders must build empathy across
the organization to help employees see impact. Focus on how AI
can help workers add more human value, rather than replace
them. For example, McDonalds added robots to their franchises,
but doesnt plan to cut human jobs. Photo: Flickr user EasySentrisentri 16
4. Engage the skeptics. Understand what they fear and start
there. Fast Forward Labs Hilary Mason shared an example of
winning buy-in by demonstrating how machine learning could
solve a problem for an overburdened regulatory team.

5. Remember: Its not magic. If a vendor cant explain their AI
product or service in terms you understand, dont buy it. Much of
whats called AI today (AI personal assistants, anyone?) is
actually humans wrangling a trove of data behind the scenes. If it
doesnt make sense, it might not be real.
Photo: Flickr user JDHancock 18
Some AI terms are used primarily for marketing
purposes, while others are more technical.

Here are our translations for common terms you may

hear, whether youre being sold an AI product or
partnering with a team of AI experts. Its a great
starting point for becoming an AI leader in your

The big picture

Artificial intelligence (AI): Marketing term that describes a

continuum of non-living analytical power, fueled by fast
processing and data storages declining costs. Applications
today are termed weak AI (like IBM Watson), which are
algorithms built to accomplish a specific task. Strong AI (like
Skynet) is a term for hypothetical future applications that will
replicate human intelligence.

Big data: Buzzword alluding to a machines ability to

generate insights and learn from massive data sets,
because sensors, software, and recordkeeping generate a
lot of data. For example, The Weather Company and IBM
researched weathers impact on business by analyzing
millions of data points from weather sensors, aircraft,
smartphones, buildings, and vehicles.

Most important to remember

Machine learning: Method of automated analytical model

building. Machine learning lets computers find hidden
insights without being explicitly programmed where to look.
For instance, Facebooks machine learning software uses
algorithms and data points to show a user suggested
friends, display relevant ads, and detect spam.

Algorithm: Formula that represents a relationship between

things. Its a self-contained, step-by-step set of operations
that automates a function, like a process, recommendation,
or analysis. For example, Netflixs recommendation
algorithms can predict what movies a consumer might want
to watch based on their viewing history.

Nuts and bolts

Deep learning: Branch of machine learning that uses

multiple layers of distributed representations (neural
networks) to recognize patterns in digital sounds, images,
or other data. For example, Googles DeepDream photo-
editing software allows neural networks to hallucinate
patterns and images in a photo.

Neural networks: Computational approach that loosely

models how the brain solves problems with layers of inputs
and outputs. Rather than being programmed, the networks
are trained with several thousand cycles of interaction.
Businesses can use these to do a lot with a little; for
example, neural networks can generate image captions,
classify objects, or predict stock market fluctuations.

Nuts and bolts

Natural language processing: Field of study in which

machines are trained to understand human language using
machine-learning techniques. Its useful for automatic
translations, chatbots, or AI personal assistants. Think of
the robot voice that picks up your helpline call and asks,
What can I help you with? or an automated chatbot that
responds to your texts.

Parsing: The process of evaluating text according to a set

of grammar or syntax rules. You can build algorithms that
parse text according to English grammar rules, for example,
to aid natural language processing.

Recommended reading

AI: The big picture

The Hype and Hope of Artificial Intelligence, The New Yorker

What Counts as Artificially Intelligent? AI and Deep Learning,

Explained, The Verge

The Extraordinary Link Between Deep Neural Networks and the

Nature of the Universe, MIT Technology Review

The Competitive Landscape for Machine Intelligence, Harvard

Business Review

What Do PeopleNot Techies, Not CompaniesThink About

Artificial Intelligence?, Harvard Business Review

How companies use AI today
An Exclusive Look at Machine Learning at Apple, Backchannel

Preparing for the Future of Artificial Intelligence, White House Blog

Using Artificial Intelligence to Transform Healthcare with Pinaki

Dsagupta, Hindsight, Startup Health

Beyond Siri, The Next-Generation AI Assistants Are Smarter

Specialists, Fast Company

Infographic: What You Need to Know About Google RankBrain,


Facebook is Giving Away the Software it Uses to Understand Objects

in Photos, The Verge

How AI is Changing Human Resources, Fast Company

Beyond Automation, Harvard Business Review

Ethical considerations
The Head of Googles Brain Team is More Worried about the Lack of
Diversity in Artificial Intelligence than an AI Apocalypse, re/code

The Tradeoffs of Imbuing Self-Driving Cars With Human Morality,


If We Dont Want AI to Be Evil, We Should Teach It to Read, Motherboard

The Ethics of Artificial Intelligence, Nick Bostrom

Twitter Taught Microsoft's AI Chatbot to be a Racist Asshole in Less

Than a Day, The Verge

Algorithms Are Biased Against Women and the Poor, According to a

Former Math Professor, The Cut

Elon Musk elaborates on his AI concerns, Sam Altman YouTube interview

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