Firms rushing to the fast lane of artificial intelligence

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To understand how fast business is moving in adopting artificial intelligence, consider how much the past eight months have changed the life of former Google executive Lior Ron, the star attraction at a conference hosted by the University of Toronto's Rotman School of Management.

In less than a year, Mr. Ron co-founded a company called Otto, built a system that can drive a truck and installed it on an 18-wheel rig that successfully carried 50,000 cans of Budweiser across 190 kilometres of Colorado highway, the first commercial delivery using a self-driving truck. And then he sold Otto to Uber for a reported $680-million (U.S.) and a share of future profits.

Mr. Ron came to Rotman Thursday to give first-hand testimony on the transformative, disruptive and potentially lucrative power of artificial intelligence (AI) to a packed-to-the-rafters gathering of business and tech talent. The message: AI is now changing how we work and play the same way the Internet revolutionized society after being widely introduced in the mid-1990s. The message is getting widespread attention; after Mr. Ron left the stage, Ontario Premier Kathleen Wynne dropped by to hand out awards to leading local players.

Mr. Ron, who ran Google Maps before founding Otto, was asked how he was able to take self-driving trucks from a fuzzy concept to a $680-million company in just a few months. He drew laughs by earnestly explaining eight months "is a lot of weeks." Otto's software was written in four weeks. The company had a prototype piloting a rig within seven weeks. That gives some sense of the pace of change. Now consider how many trucks are on the road. That explains why Uber wrote the big cheque.

The Rotman school, to its credit, is ahead of the curve on corporate innovation in general and AI in particular. With the backing of several entrepreneurs and institutions such as Bank of Nova Scotia, MasterCard and Royal Bank of Canada, the business school launched Creative Destruction Lab (CDL) four years ago as an incubator for scalable, science-based startups – ventures that are already worth more than $850-million. In 2015, the lab launched a program focused on AI ventures and organized an annual conference titled "Machine Learning and the Market for Intelligence."

CDL founder Ajay Agrawal, a Rotman professor, kicked off Thursday's conference by explaining why AI will have a massive impact across the economy, remaking health care, transportation, agriculture, energy, retailing and manufacturing.

Mr. Agrawal pointed out that the common element for AI systems is that they mimic humans in their ability to take in data and predict outcomes. Take driverless trucks. Until recently, it was impossible to put autonomous vehicles on city streets because no computer program could deal with vast number of scenarios that exist in this uncontrolled environment. But newly created AI can be taught to drive, using input from vehicle sensors and data drawn from decisions previously made by experienced truckers. Mr. Ron made $680-million by successfully building an AI that can predict what a human driver would do.

Mr. Agrawal then explained: "Recent advances in machine intelligence represent a staggering reduction in the cost of prediction."

For example, consider what's coming in health care. Picture an AI system attached to the your cellphone or fitness tracker. By monitoring heart rate, blood pressure and other vital signs, the AI could pick up on health issues at an early stage. Early detection would displace diagnostic work currently done by doctors and nurses, but would increase demand for medical treatment. He said the introduction of AI "does not spell doom for human jobs, as many experts suggest. This is because the value of human judgment skills will increase."

Rotman began tracking AI companies three years ago. At Thursday's conference, organizers put up a slide from 2014 that contained about 30 corporate names and noted most of those interested in the sector at that time were academics.

Next, a Rotman slide went up from last year, showing at least 60 AI companies. Organizers said that, by 2015, potential investors were asking about these ventures. In the past 12 months, Rotman experts said CEOs have started calling to ask how AI can be integrated with their businesses.

Then, a soon-to-be released Rotman study went up on the screen, a slide with the names of at least 150 up-and-coming AI companies. And across the standing-room crowd, cellphones were whipped out to take a photo of the names.

There is an AI revolution under way, and no one wanted to be left behind.