From Jon Markman: Imagine the ability to look at something and know almost everything about it. It would kind of be like a superpower.
Alphabet (GOOGL) and Microsoft (MSFT) have tools to do it – right now. They are tinkering with artificial intelligence, racks of cloud computing power and ordinary cameras found in every smartphone. And they are anxious to give these tools to developers.
It’s going to lead to a new class of corporate superheroes, and the reinvention of business models.
We should not be surprised. This is the New Gilded Age.
Information technology is growing exponentially. It was just a matter of time before engineers figured out how to use AI to index the physical world.
At Google’s recent developer conference, CEO Sundar Pichai unveiled the smartphone app Google Lens. The camera software can easily identify people, places and objects. The sensors inside smartphones give those images context.
You just tap the Google Lens icon and point the camera lens at an object. Then the app connects to the full power of Google’s massive knowledge graph.
And the object appears on the phone’s screen along with options to get more information. For example, if you aimed at a restaurant, Google Lens can show you the eatery’s hours, menu and reviews.
Microsoft is going one step further. Its Custom Vision Search software recognizes images in photographs and video. It adds metadata, uses facial recognition, can transcribe real-time video and even provide translation to supported languages.
Now, imagine what they will build.
Maintenance workers in the field might gain instant access to repair manuals. The addition of augmented-reality visors would free their hands, boosting productivity and reducing training times. Retailers might enhance the in-store shopping experience by making information about pricing and availability just a snapshot away. The possibilities are endless.
The applications will come, soon. Both Microsoft and Alphabet are leading public cloud-computing vendors. All of the corporate world is headed to the public cloud or some combination of public cloud and corporate data center.
Gartner, an information technology research firm, argues cloud computing has the potential to be a $1 trillion sector.
Companies have already been migrating because it’s more modular, more secure and ultimately more cost-efficient.
The rapid ascent of AI will hasten the advance.
There is a growing consensus that if your company doesn’t have an AI strategy, it is going to be disrupted by one that does. IDC predicts spending for AI projects will rise to $47 billion by 2020. For reference, it was $8 billion in 2016. And Andrew Ng – the ex-Google, ex-Baidu AI guru – calls AI the new electricity.
It’s high praise. It’s also kind of reality. AI allows companies to take data and turn it into actionable intelligence. The way superheroes see nefarious behavior and leap into action.
Some people might think the only way to play the trend is Microsoft, Alphabet and Amazon (AMZN), the major public-cloud companies. That is simply not true. AI changes business models. The tumult will be felt in every sector.
I help my Pivotal Point Trader members find winners, and avoid losers.
And there are plenty of companies hiding in the most unlikely places, from banking to oil-well services. It really is the start of something new and important. A new breed of super stocks is being forged by New Gilded Age advances.
The Technology Select Sector SPDR Fund (NYSE:XLK) was trading at $57.17 per share on Thursday morning, down $0.14 (-0.24%). Year-to-date, XLK has gained 18.22%, versus a 8.89% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Jon Markman\’ s Pivotal Point.