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What the hell is an AI factory?


If you follow the news on artificial intelligence, you’ll find two diverging threads. The media and cinema often portray AI with human-like capabilities, mass unemployment, and a possible robot apocalypse. Scientific conferences, on the other hand, discuss progress toward artificial general intelligence while acknowledging that current AI is weak and incapable of many of the basic functions of the human mind.

But regardless of where they stand in comparison to human intelligence, today’s AI algorithms have already become a defining component for many sectors, including health care, finance, manufacturing, transportation, and many more. And very soon “no field of human endeavor will remain independent of artificial intelligence,” as Harvard Business School professors Marco Iansiti and Karim Lakhani explain in their book Competing in the Age of AI: Strategy and Leadership When Algorithms and Networks Run the World.

In fact, weak AI has already led the growth and success of companies such as Google, Amazon, Microsoft, and Facebook, and is impacting the daily lives of billions of people. As Lakhani and Iansiti discuss in their book, “We don’t need a perfect human replica to prioritize content on a social network, make a perfect cappuccino, analyze customer behavior, set the optimal price, or even, apparently, paint in the style of Rembrandt. Imperfect, weak AI is already enough to transform the nature of firms and how they operate.”

Startups that understand the rules of running AI-powered businesses have been able to create new markets and disrupt traditional industries. Established companies that have adapted themselves to the age of AI survived and thrived. Those that stuck to old methods have ceased to exist or become marginalized after losing ground to companies that have harnessed the power of AI.

Among the many topics Iansiti and Lakhani discuss is the concept AI factories, the key component that enables companies to compete and grow in the age of AI.

What is the AI factory?