The AI spring

- LeveragingCollectiveDisruptorInsights

1

Introduction of Turing test

Convergence of innovations has moved AI forward in the last few years

1950

Computational Power

Data Platforms

Better Algorithms

First AI programto play Tic Tac Toe

1960

RDBMS

LOGIC THEOREMS-Single layer learning, Perceptron, Adaline

IBM Deep blue defeats Gary Kasparov

1997

OLAP

NEURAL NETWORKS- Multilayer Back propagation

512Core GPU

2880Core GPU

12000Core GPU

Cost of Computing

$200Per million transistors

$50Per million transistors

$0.05Per million transistors

2011 2015

Watson became Jeopardy Champion

BIGDATA PLATFORMS-HDFS

DEEP LEARNING -Convoluted Neural Network

2

DeepMind’s self-taught AI can beat human players at 29 of 49 Atari games

And is disrupting all industry verticals

1- Analysed basis data maturity, software penetration, regulatory restrictions across the value chain representing disruption potential over next 5 years2 – Analysed basis current investments ( talent + acquisition) for all players

BFSI

Healthcare

Pote

ntia

l to

Dis

rupt

ion

1

AI Maturity 2

Retail

Predictive diabetes management solution

AI based Robo advisory service.

Enterprise Software

Semicon

Consumer Electronics Microsoft cloud platform Azure, has NLP capabilities

Nvidia’s Machine Learning Enabled Hardware - 12x faster.

Recommends what styles to wear based on current customer photographs

Driven 130 million miles using the autopilot feature since

2014.Auto

Aerospace

Consumer Software

95% of Facebook’s $17B revenue was generated through ML enabled Advertising.

3Source: GEIP

Telecom

Artificial neural network to adjust helicopter rotors faster and more accurately

Amazon Echo-equipped with the NLP platform Alexa.

Healthcare

Infrastructure

Tech Mafias are building an AI-first future

Automotive Consumer

AI Talent Acquisition Patents 30K $10 B 300+

Wearables for Health monitoring

Project Titan

Siri controlled home kit

AppleSmartwatch

iPhone iOS 10 image recognition

Spotlight for images & text Siri

AIPlatforms

Kinect

SwiftKey

Cortana for Healthcare

Microsoft –Volvo Self driving

Cortana

Microsoft Graph –Sales lead scoring

Hololens

Azure MLDSSTNE

Oculus

Facial recognition

Facebook M

Facebook Deeptext

FAIRWit.ai

Alexa

Recommender systems

AWS MLCNTK

4Source:GEIP

Allo

Google Home

Verily –algorithms for Diagnosis

Deepmind for Healthcare

Google X nanoparticle

research

Google X –Self Driving

Android Wear Smartwatch

AI Robot-GoogleX

Google Prediction API

Google Now

Tensorflow

Project Jacquard

Deepmind Google for Work

5

Sensing the opportunity, VCs have increased their investment in AI start-ups

Quarterly funding trend (2013-16 YTD)

Q1, 2012

Q1, 2013

Q1, 2014

Q1, 2015

Q1, 2016

$94$137

$253

$121

$302

$552

$926 $901

$602

$1,049Raises $100M for Deep learning based ultrasound

Google acquires Deepmind for$500M

Raises $65M for ML based threat detection

Q1, 2011

Focussing on reverse engineering the neocortex raised series A

AI based unicorns have emerged since July, 20165

Billion Dollar Valuation Line

Zoox

Valuation - $1.85 BnHealthcare

Valuation - $1.55 BnAutomotive

Valuation - $1.5 BnEnterprise

Valuation - $1 BnConsumer

Valuation - $1 BnHealthcare

Valu

atio

n

Age of Start-up

Zymergen

Healthcare

Infrastructure

AI start-ups are ambitious and trying to disrupt various industry verticals

Automotive Consumer

AI Talent Funding Patents 45K $15 B 200+

iCarbonX

ZooxApi.ai

Lumiata

ButterflyZymergen

Drive.ai

Affectiva

H20.ai

Attivio

AI Platforms

Imagen Technologies

Nutonomy

Diffbot

Sentient.ai

x.ai

Vicarious Systems TrifactaAyasdi

6Source: GEIP

MobilEye

ZenDriveAnki Jibo

Magisto

Ugobe Mioji

Luka

Gluru

EmotechSherpa

SentenAI

SigOpt

$ 721 Mn in investments

$ 1217 Mn in investments

$ 365 Mn in investments

$ 1032 Mn in investments

$ 996 Mn in investments

7

Traditional methods of analysing individual competitors doesn’t work in analysing start-ups

Porter’s Five Forces Model SWOT Analysis7S Framework

8

SWARM DISRUPTIONFRAMEWORK

Leveraging fresh lenses to understand the collective impact of disruptive start-ups in highly

dynamic segments like artificial intelligence to track developments in key business dimensions

Zinnov’s Swarm Disruption Model provides an holistic approach to gain insights from start-ups

9

Uses data from Zinnov’s proprietary database on start-ups

10

Sample lenses used to gain insights on the AI Swarm disruptions

Value Chain Disaggregation

Understand collaboration points with AI start-ups across the industry value chain

Deadpool Intensity

Analyse constraints for AI start-ups to scale and gain perspective into market conditions

Absorption Pulse

Examine the focus areas and drivers for M&A & investment strategies of incumbents

Use Case Adoption

Patterns on the top use cases adopted by highly scalable general purpose AI platforms

Global Ecosystem Maturity

Congregation of AI start-ups in enabling ecosystems across the world

Skillset Transformation

Adapt to the changing human capital needs to drive an AI-first business strategy

Value Chain Disaggregation

11

Start-ups are leveraging deep learning techniques to build solutions for autonomous cars and infotainment systems

ADAS Driver Safety Autonomous cars

Image Processing

Connected Car/ Infotainment

Machine Learning

NLP

Computer Vision

DeepLeaning

$24M

$10M

$80M

$18M

$337M

Tota

l Fun

ding

of V

alue

Cha

in S

egm

ent

VALUE CHAIN SEGMENT

AI T

ECH

NO

LOG

Y

Key Trends in Auto Start-up LandscapeImpact Assessment of AI start-ups in the automotive value chain

HighLowAI Tech Adoption

Tier 1 players on acquisition

spree

Interest from Non Automotive

Companies

OEMs creating innovation labs

in Bay Area

Emergence of New Tier 1

players

12

AI start-ups are leveraged across the retail value chainby large retail enterprises

Security& Surveillance

Supply Chain Management

In-Store Analytics

Customer Engagement

Multi-Channel Marketing

Subscription Model

Licensing Model

One Time Payment

Affiliate Fees

$24M

$ 90M

$ 159M

$ 100M $105M

Tota

l Fun

ding

of V

alue

Cha

in S

egm

ent

Acquired predictive Intelligence Platform to reduce fraud and improve customer targeting

Customer Engagement

Supply Chain Management

Acquired Machine learning platform that solves out-of-stock and overstocking problems

Top retailers are partnering with AI start-ups to bolster their value chain

Impact Assessment of AI start-ups in the retail value chain

Lowe’s set up an innovation lab in Bangalore for AR/VR tools on demand manufacturing and robotics

Value Chain Disaggregation

BU

SIN

ESS

MO

DEL

S

VALUE CHAIN SEGMENT

HighLowAI Tech Adoption

13

AI platform companies are prioritizing use cases in Finance, Marketing and Healthcare

Total Funding

Patents

Vicarious Systems DataRobot

$135.8 Mn $97.9M $75.6 Mn $67M $57.4 Mn

8 16 9 - 3

Total Funding

Patents

$48M $37.4 Mn $34.2 M $30.6 Mn $30M

4 29 42 - 2

Sentiment Analysis

Personal-ization

Customer Engagement

Digital Marketing

Marketing

Fraud Detection

Insurance claims

Algorithmic Trading

Risk Modelling

Finance

Patient Monitoring

Drug Delivery

Population Health

Precision Medicine

Clinical Variance

Healthcare

Use Case Adoption

14

US is the dominant innovation hotbed for AI start-ups led by the Bay Area Ecosystem

2322Start-ups

$14.74Billion

Global AI start-up distribution

86Canada

Netherlands25

26Australia

Brazil

18

France

43

25 Singapore

Hong Kong12

Total FundingNo. of Start-ups

Global AI start-up distribution

$11.5 B

$0.6B

$0.03 B$0.5 B

$0.6 B

$0.1 B $0.1 B

$0.1 B

APPLICATIONS-FINTECH, HEALTHCARE

APPLICATIONS –HRTECH, HEALTHCAREAPPLICATIONS – AUTO, FINTECH, RETAIL

PLATFORMS- DEEPLEARNING, VISION

ENABLERS –BIGDATA PLATFORMS

Vision based advanced assistance system

AI based consumer robotics start-up

Massively scaled deep learning

ML based threat detection

ML based recruitment solution

ML for retail

ML for personalised healthcare

NLP API

Data cataloguing and cleaning

PLATFORMS- DEEPLEARNING, NLP

GlobalEcosystemMaturity

$0.1B

6deals

15

Corporate acquisitions and investment strategies indicate the direction the industry is focussed on

BuildNewProducts

BolsterTechnologyStack

23deals

$625MGoogle

Deepmind

EnterNewMarkets

10deals

Notdisclosed

Amazon

Snaptell

Facebook

Wit.aiNot

Disclosed

AcquihireTalent

6deals

Intel

IndisysNot

Disclosed

TechnologyandmarketexpansionareprimarydriversforM&A

Amazon Apple Facebook MicrosoftGoogle

AcquisitionYear

Acqu

ireeMaturity

DotComEra SmartphoneEra CognitiveEra

2004 2010 2016

1

2

3

4

5BulkoftheacquisitionsbyMicrosoft and

Google toboosttheirSearchTech.

MS andApple beginworkonGestureControl

devices.TheTechMafiainvestingheavily

inAIenablementplatformsGoogle beginworkonMaps

NLP VisionML NLP Vision ML NLP Vision Robotics

IndicatesAverage

Salesforce Intel Oracle IBM GE

AbsorptionPulse

16

LegendApplication CompaniesPlatform CompaniesInfrastructure Companies

Consumer Enterprise IndustryML NLP Vision

Data Platform Hardware

Age of Start-up0 2 4 6 8 10 12

Deadpool

Scal

e (B

ased

on

Inve

stm

ents

, Hea

dcou

nt G

row

th a

nd C

usto

mer

Tra

ctio

n)

Major factors that have prevented AI start-ups from crossing the value chasm

Regulatory Restrictions

Business Model

Product Market Fit

Regulatory restriction and lack of product/market fit dominates the reason for start-up failures

Series A

Seed. $3.1M

Series C

Comma.ai

*700 Start-ups plotted

Deadpool Intensity

17

AI start-up engineering footprint distantly different fromincumbent competitors

R&D

IT

Sales & BD

Product Management

Others

29.7% 33%

21.5% 7%

30% 38%

5.8% 4%

13% 17%

HC 10+ yrs exp

Hardware

Software

Architect

Analytics

UI/UX

24%

23%

5%

6%

14%

73%

50%

92%

55%

52%

HC 10+ yrs exp

12%

18%

4%

12%

10%

80%

30%

90%

36%

40%

ML/NLP

Release

QA

11%

8%

11%

42%

27%

73%

43%

-

2%

26%

-

-

Engineering Talent Hired From

Skillset Transformation

18

Swarm Disruption Model will allow enterprise leadership teams to answer several strategic questions

CTO HR

Product Manager

Strategy and M&A

“

“

What are the emerging technology paradigms that disruptors are leveraging to get ahead ?

What is the nature of talent I need to recruit to make my business AI – ready ?

“

“

What are the top locations where my organization can hire new age skills ?

“

“

How mature are start-ups operating in aligned areas and what synergies can they bring ?

Should I invest, acquire or partner with emerging disruptors in my space ?

“

“

What value adding features can be incorporated into my products to enhance customer satisfaction ?

What new business models are gaining traction in my industry ?

19

20

Agenda

APPENDIX

21

Lenses(1/2)Dimension Lens Description

ValueChain ValueChainDisaggregation

IndustriesandOrgfunctionssuchasHR/LegaletcbrokendownintosegmentsofthevaluechainandmappedagainstpotentialforimpactbyAItechnologiesandstart-ups

ValueChain ValueChainAggregation Examinesintegrationofdifferentsegmentsofthevaluechaintoincreasevalue.Forexamplecustomeranalyticsresultinginpredictivesupplychainmanagement

ValueChain ProfitConcentration

Technology TechnologyMaturity Maturityoftechnologyplatformsintheindustryintermsofadoptionandintegrability

Technology Autonomy&Manageability

Capabilityoftechnologytomanageendtoendoperationsandthedegreeofsupport/overheadrequiredtodeliveragoodcustomerexperience

Technology ThirdPartyTools/Infra TheavailabilityofthirdpartytoolsandinfrastructuresuchasAPIs,SDKs,Serversetctoacceleratedevelopmentofnewsolutions

Technology ExtensionPropensity Theabilityofthetechnologytoscaleandaddressawiderangeofusecases

Market UseCaseAdoption PatternsonthetopusecasesadoptedbyhighlyscalablegeneralpurposeAIplatforms

Market MarqueeCustomerTraction

Areaswherestart-upshavebeenabletoon-boardFortune500customersandlargeaccounts

Market DeadpoolIntensity Examinesthestart-upsthathavefailedinindustrysegmentsandthemajorreasonsforfailure

Market NonConsumptionIndex Examinesmarketsegmentsthathavewitnessedvolumesofnewentrantsbutlimitedtraction

22

Lenses(2/2)

Dimension Lens Description

ConsumptionPattern BusinessModeltrends Examinesthenatureofbusinessmodelsacrossindustrysegmentsandidentifiesproliferationofnovelbusinessmodels

ConsumptionPattern NextGenerationInterfaces

Studiesthepreferenceofcustomerstointeractwithtechnology(Voice,Mobile,Webetc)

Consumptionpattern CustomerEngagementParadigm

Initiativestakenbydisruptorstoenhancecustomerengagementonlineandoffline

ConsumptionPattern CustomerExperienceEvolution

Examineshowcustomerexperienceisevolvingacrossindustriesandtheroleplatedbydisruptors

Ecosystem GlobalEcosystemMaturity

UnderstandlocationswithhighproportionoftalentpoolinbuildingAIhorizontalplatformswithacalloutforskillpoolsofMachineLearning,NLP,ComputerVision,BigDataAnalytics

Ecosystem AbsorptionPulse ExaminethefocusareasandkeydriversforM&Aandinvestmentstrategiesofprominentincumbents

Ecosystem Collaborationintensity Identifythepropensityofswarmstocollaboratewithincumbents,universitiesanddevelopercommunitiesacrosssegments

Ecosystem SkillsetTransformation Howengineeringorganizationsareevolvingtobemoreleanandagileinthenewenvironment