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Exponential technologies (AI, VR, 3D printing, and networks) are radically reshaping traditional retail.
E-commerce giants (Amazon, Walmart, Alibaba) are digitizing the retail industry, riding the exponential growth of computation.
Many brick-and-mortar stores have already gone bankrupt, or migrated their operations online.
Massive change is occurring in this arena.
For those “real-life stores” that survive, an evolution is taking place from a product-centric mentality to an experience-based business model by leveraging AI, VR/AR, and 3D printing.
Let’s dive in.
Last year, 3.8 billion people were connected online. By 2024, thanks to 5G, stratospheric and space-based satellites, we will grow to 8 billion people online, each with megabit to gigabit connection speeds.
These 4.2 billion new digital consumers will begin buying things online, a potential bonanza for the e-commerce world.
At the same time, entrepreneurs seeking to service these four-billion-plus new consumers can now skip the costly steps of procuring retail space and hiring sales clerks.
Today, thanks to global connectivity, contract production, and turnkey pack-and-ship logistics, an entrepreneur can go from an idea to building and scaling a multimillion-dollar business from anywhere in the world in record time.
And while e-commerce sales have been exploding (growing from $34 billion in Q1 2009 to $115 billion in Q3 2017), e-commerce only accounted for about 10 percent of total retail sales in 2017.
In 2016, global online sales totaled $1.8 trillion. Remarkably, this $1.8 trillion was spent by only 1.5 billion people — a mere 20 percent of Earth’s global population that year.
There’s plenty more room for digital disruption.
AI and the Retail Experience
For the business owner, AI will demonetize e-commerce operations with automated customer service, ultra-accurate supply chain modeling, marketing content generation, and advertising.
In the case of customer service, imagine an AI that is trained by every customer interaction, learns how to answer any consumer question perfectly, and offers feedback to product designers and company owners as a result.
Facebook’s handover protocol allows live customer service representatives and language-learning bots to work within the same Facebook Messenger conversation.
Taking it one step further, imagine an AI that is empathic to a consumer’s frustration, that can take any amount of abuse and come back with a smile every time. As one example, meet Ava. “Ava is a virtual customer service agent, to bring a whole new level of personalization and brand experience to that customer experience on a day-to-day basis,” says Greg Cross, CEO of Ava’s creator, an Austrian company called Soul Machines.
Predictive modeling and machine learning are also optimizing product ordering and the supply chain process. For example, Skubana, a platform for online sellers, leverages data analytics to provide entrepreneurs constant product performance feedback and maintain optimal warehouse stock levels.
Blockchain is set to follow suit in the retail space. ShipChain and Ambrosus plan to introduce transparency and trust into shipping and production, further reducing costs for entrepreneurs and consumers.
Meanwhile, for consumers, personal shopping assistants are shifting the psychology of the standard shopping experience.
Amazon’s Alexa marks an important user interface moment in this regard.
Alexa is in her infancy with voice search and vocal controls for smart homes. Already, Amazon’s Alexa users, on average, spent more on Amazon.com when purchasing than standard Amazon Prime customers — $1,700 versus $1,400.
As I’ve discussed in previous posts, the future combination of virtual reality shopping, coupled with a personalized, AI-enabled fashion advisor will make finding, selecting, and ordering products fast and painless for consumers.
But let’s take it one step further.
Imagine a future in which your personal AI shopper knows your desires better than you do. Possible? I think so. After all, our future AIs will follow us, watch us, and observe our interactions — including how long we glance at objects, our facial expressions, and much more.
In this future, shopping might be as easy as saying, “Buy me a new outfit for Saturday night’s dinner party,” followed by a surprise-and-delight moment in which the outfit that arrives is perfect.
In this future world of AI-enabled shopping, one of the most disruptive implications is that advertising is now dead.
In a world where an AI is buying my stuff, and I’m no longer in the decision loop, why would a big brand ever waste money on a Super Bowl advertisement?
The dematerialization, demonetization, and democratization of personalized shopping has only just begun.
The In-Store Experience: Experiential Retailing
In 2017, over 6,700 brick-and-mortar retail stores closed their doors, surpassing the former record year for store closures set in 2008 during the financial crisis. Regardless, business is still booming.
As shoppers seek the convenience of online shopping, brick-and-mortar stores are tapping into the power of the experience economy.
Rather than focusing on the practicality of the products they buy, consumers are instead seeking out the experience of going shopping.
The Internet of Things, artificial intelligence, and computation are exponentially improving the in-person consumer experience.
As AI dominates curated online shopping, AI and data analytics tools are also empowering real-life store owners to optimize staffing, marketing strategies, customer relationship management, and inventory logistics.
In the short term,retail store locations will serve as the next big user interface for production 3D printing (custom 3D printed clothes at the Ministry of Supply), virtual and augmented reality (DIY skills clinics), and the Internet of Things (checkout-less shopping).
In the long term,we’ll see how our desire for enhanced productivity and seamless consumption balances with our preference for enjoyable real-life consumer experiences — all of which will be driven by exponential technologies.
One thing is certain: the nominal shopping experience is on the verge of a major transformation.
The convergence of exponential technologies has already revamped how and where we shop, how we use our time, and how much we pay.
Twenty years ago, Amazon showed us how the web could offer each of us the long tail of available reading material, and since then, the world of e-commerce has exploded.
And yet we still haven’t experienced the cost savings coming our way from drone delivery, the Internet of Things, tokenized ecosystems, the impact of truly powerful AI, or even the other major applications for 3D printing and AR/VR.
Perhaps nothing will be more transformed than today’s $20 trillion retail sector.
Hold on, stay tuned, and get your AI-enabled cryptocurrency ready.
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Jerky mechanical robots are staples of science fiction, but to seamlessly integrate into everyday life they’ll need the precise yet powerful motor control of humans. Now scientists have created a new class of artificial muscles that could soon make that a reality.
The advance is the latest breakthrough in the field of soft robotics. Scientists are increasingly designing robots using soft materials that more closely resemble biological systems, which can be more adaptable and better suited to working in close proximity to humans.
One of the main challenges has been creating soft components that match the power and control of the rigid actuators that drive mechanical robots—things like motors and pistons. Now researchers at the University of Colorado Boulder have built a series of low-cost artificial muscles—as little as 10 cents per device—using soft plastic pouches filled with electrically insulating liquids that contract with the force and speed of mammalian skeletal muscles when a voltage is applied to them.
Three different designs of the so-called hydraulically amplified self-healing electrostatic (HASEL) actuators were detailed in two papers in the journals Science and Science Robotics last week. They could carry out a variety of tasks, from gently picking up delicate objects like eggs or raspberries to lifting objects many times their own weight, such as a gallon of water, at rapid repetition rates.
“We draw our inspiration from the astonishing capabilities of biological muscle,” Christoph Keplinger, an assistant professor at UC Boulder and senior author of both papers, said in a press release. “Just like biological muscle, HASEL actuators can reproduce the adaptability of an octopus arm, the speed of a hummingbird and the strength of an elephant.”
The artificial muscles work by applying a voltage to hydrogel electrodes on either side of pouches filled with liquid insulators, which can be as simple as canola oil. This creates an attraction between the two electrodes, pulling them together and displacing the liquid. This causes a change of shape that can push or pull levers, arms or any other articulated component.
The design is essentially a synthesis of two leading approaches to actuating soft robots. Pneumatic and hydraulic actuators that pump fluids around have been popular due to their high forces, easy fabrication and ability to mimic a variety of natural motions. But they tend to be bulky and relatively slow.
Dielectric elastomer actuators apply an electric field across a solid insulating layer to make it flex. These can mimic the responsiveness of biological muscle. But they are not very versatile and can also fail catastrophically, because the high voltages required can cause a bolt of electricity to blast through the insulator, destroying it. The likelihood of this happening increases in line with the size of their electrodes, which makes it hard to scale them up. By combining the two approaches, researchers get the best of both worlds, with the power, versatility and easy fabrication of a fluid-based system and the responsiveness of electrically-powered actuators.
One of the designs holds particular promise for robotics applications, as it behaves a lot like biological muscle. The so-called Peano-HASEL actuators are made up of multiple rectangular pouches connected in series, which allows them to contract linearly, just like real muscle. They can lift more than 200 times their weight, but being electrically powered, they exceed the flexing speed of human muscle.
As the name suggests, the HASEL actuators are also self-healing. They are still prone to the same kind of electrical damage as dielectric elastomer actuators, but the liquid insulator is able to immediately self-heal by redistributing itself and regaining its insulating properties.
The muscles can even monitor the amount of strain they’re under to provide the same kind of feedback biological systems would. The muscle’s capacitance—its ability to store an electric charge—changes as the device stretches, which makes it possible to power the arm while simultaneously measuring what position it’s in.
The researchers say this could imbue robots with a similar sense of proprioception or body-awareness to that found in plants and animals. “Self-sensing allows for the development of closed-loop feedback controllers to design highly advanced and precise robots for diverse applications,” Shane Mitchell, a PhD student in Keplinger’s lab and an author on both papers, said in an email.
The researchers say the high voltages required are an ongoing challenge, though they’ve already designed devices in the lab that use a fifth of the voltage of those features in the recent papers.
In most of their demonstrations, these soft actuators were being used to power rigid arms and levers, pointing to the fact that future robots are likely to combine both rigid and soft components, much like animals do. The potential applications for the technology range from more realistic prosthetics to much more dextrous robots that can work easily alongside humans.
It will take some work before these devices appear in commercial robots. But the combination of high-performance with simple and inexpensive fabrication methods mean other researchers are likely to jump in, so innovation could be rapid.
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You don’t have to dig too deeply into the archive of dystopian science fiction to uncover the horror that intelligent machines might unleash. The Matrix and The Terminator are probably the most well-known examples of self-replicating, intelligent machines attempting to enslave or destroy humanity in the process of building a brave new digital world.
The prospect of artificially intelligent machines creating other artificially intelligent machines took a big step forward in 2017. However, we’re far from the runaway technological singularity futurists are predicting by mid-century or earlier, let alone murderous cyborgs or AI avatar assassins.
The first big boost this year came from Google. The tech giant announced it was developing automated machine learning (AutoML), writing algorithms that can do some of the heavy lifting by identifying the right neural networks for a specific job. Now researchers at the Department of Energy’s Oak Ridge National Laboratory (ORNL), using the most powerful supercomputer in the US, have developed an AI system that can generate neural networks as good if not better than any developed by a human in less than a day.
It can take months for the brainiest, best-paid data scientists to develop deep learning software, which sends data through a complex web of mathematical algorithms. The system is modeled after the human brain and known as an artificial neural network. Even Google’s AutoML took weeks to design a superior image recognition system, one of the more standard operations for AI systems today.
Of course, Google Brain project engineers only had access to 800 graphic processing units (GPUs), a type of computer hardware that works especially well for deep learning. Nvidia, which pioneered the development of GPUs, is considered the gold standard in today’s AI hardware architecture. Titan, the supercomputer at ORNL, boasts more than 18,000 GPUs.
The ORNL research team’s algorithm, called MENNDL for Multinode Evolutionary Neural Networks for Deep Learning, isn’t designed to create AI systems that cull cute cat photos from the internet. Instead, MENNDL is a tool for testing and training thousands of potential neural networks to work on unique science problems.
That requires a different approach from the Google and Facebook AI platforms of the world, notes Steven Young, a postdoctoral research associate at ORNL who is on the team that designed MENNDL.
“We’ve discovered that those [neural networks] are very often not the optimal network for a lot of our problems, because our data, while it can be thought of as images, is different,” he explains to Singularity Hub. “These images, and the problems, have very different characteristics from object detection.”
AI for Science
One application of the technology involved a particle physics experiment at the Fermi National Accelerator Laboratory. Fermilab researchers are interested in understanding neutrinos, high-energy subatomic particles that rarely interact with normal matter but could be a key to understanding the early formation of the universe. One Fermilab experiment involves taking a sort of “snapshot” of neutrino interactions.
The team wanted the help of an AI system that could analyze and classify Fermilab’s detector data. MENNDL evaluated 500,000 neural networks in 24 hours. Its final solution proved superior to custom models developed by human scientists.
In another case involving a collaboration with St. Jude Children’s Research Hospital in Memphis, MENNDL improved the error rate of a human-designed algorithm for identifying mitochondria inside 3D electron microscopy images of brain tissue by 30 percent.
“We are able to do better than humans in a fraction of the time at designing networks for these sort of very different datasets that we’re interested in,” Young says.
What makes MENNDL particularly adept is its ability to define the best or most optimal hyperparameters—the key variables—to tackle a particular dataset.
“You don’t always need a big, huge deep network. Sometimes you just need a small network with the right hyperparameters,” Young says.
A Virtual Data Scientist
That’s not dissimilar to the approach of a company called H20.ai, a startup out of Silicon Valley that uses open source machine learning platforms to “democratize” AI. It applies machine learning to create business solutions for Fortune 500 companies, including some of the world’s biggest banks and healthcare companies.
“Our software is more [about] pattern detection, let’s say anti-money laundering or fraud detection or which customer is most likely to churn,” Dr. Arno Candel, chief technology officer at H2O.ai, tells Singularity Hub. “And that kind of insight-generating software is what we call AI here.”
The company’s latest product, Driverless AI, promises to deliver the data scientist equivalent of a chessmaster to its customers (the company claims several such grandmasters in its employ and advisory board). In other words, the system can analyze a raw dataset and, like MENNDL, automatically identify what features should be included in the computer model to make the most of the data based on the best “chess moves” of its grandmasters.
“So we’re using those algorithms, but we’re giving them the human insights from those data scientists, and we automate their thinking,” he explains. “So we created a virtual data scientist that is relentless at trying these ideas.”
Inside the Black Box
Not unlike how the human brain reaches a conclusion, it’s not always possible to understand how a machine, despite being designed by humans, reaches its own solutions. The lack of transparency is often referred to as the AI “black box.” Experts like Young say we can learn something about the evolutionary process of machine learning by generating millions of neural networks and seeing what works well and what doesn’t.
“You’re never going to be able to completely explain what happened, but maybe we can better explain it than we currently can today,” Young says.
Transparency is built into the “thought process” of each particular model generated by Driverless AI, according to Candel.
The computer even explains itself to the user in plain English at each decision point. There is also real-time feedback that allows users to prioritize features, or parameters, to see how the changes improve the accuracy of the model. For example, the system may include data from people in the same zip code as it creates a model to describe customer turnover.
“That’s one of the advantages of our automatic feature engineering: it’s basically mimicking human thinking,” Candel says. “It’s not just neural nets that magically come up with some kind of number, but we’re trying to make it statistically significant.”
Much digital ink has been spilled over the dearth of skilled data scientists, so automating certain design aspects for developing artificial neural networks makes sense. Experts agree that automation alone won’t solve that particular problem. However, it will free computer scientists to tackle more difficult issues, such as parsing the inherent biases that exist within the data used by machine learning today.
“I think the world has an opportunity to focus more on the meaning of things and not on the laborious tasks of just fitting a model and finding the best features to make that model,” Candel notes. “By automating, we are pushing the burden back for the data scientists to actually do something more meaningful, which is think about the problem and see how you can address it differently to make an even bigger impact.”
The team at ORNL expects it can also make bigger impacts beginning next year when the lab’s next supercomputer, Summit, comes online. While Summit will boast only 4,600 nodes, it will sport the latest and greatest GPU technology from Nvidia and CPUs from IBM. That means it will deliver more than five times the computational performance of Titan, the world’s fifth-most powerful supercomputer today.
“We’ll be able to look at much larger problems on Summit than we were able to with Titan and hopefully get to a solution much faster,” Young says.
It’s all in a day’s work.
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The first time Dr. Blake Richards heard about deep learning, he was convinced that he wasn’t just looking at a technique that would revolutionize artificial intelligence. He also knew he was looking at something fundamental about the human brain.
That was the early 2000s, and Richards was taking a course with Dr. Geoff Hinton at the University of Toronto. Hinton, a pioneer architect of the algorithm that would later take the world by storm, was offering an introductory course on his learning method inspired by the human brain.
The key words here are “inspired by.” Despite Richards’ conviction, the odds were stacked against him. The human brain, as it happens, seems to lack a critical function that’s programmed into deep learning algorithms. On the surface, the algorithms were violating basic biological facts already proven by neuroscientists.
But what if, superficial differences aside, deep learning and the brain are actually compatible?
Now, in a new study published in eLife, Richards, working with DeepMind, proposed a new algorithm based on the biological structure of neurons in the neocortex. Also known as the cortex, this outermost region of the brain is home to higher cognitive functions such as reasoning, prediction, and flexible thought.
The team networked their artificial neurons together into a multi-layered network and challenged it with a classic computer vision task—identifying hand-written numbers.
The new algorithm performed well. But the kicker is that it analyzed the learning examples in a way that’s characteristic of deep learning algorithms, even though it was completely based on the brain’s fundamental biology.
“Deep learning is possible in a biological framework,” concludes the team.
Because the model is only a computer simulation at this point, Richards hopes to pass the baton to experimental neuroscientists, who could actively test whether the algorithm operates in an actual brain.
If so, the data could then be passed back to computer scientists to work out the next generation of massively parallel and low-energy algorithms to power our machines.
It’s a first step towards merging the two fields back into a “virtuous circle” of discovery and innovation.
The blame game
While you’ve probably heard of deep learning’s recent wins against humans in the game of Go, you might not know the nitty-gritty behind the algorithm’s operations.
In a nutshell, deep learning relies on an artificial neural network with virtual “neurons.” Like a towering skyscraper, the network is structured into hierarchies: lower-level neurons process aspects of an input—for example, a horizontal or vertical stroke that eventually forms the number four—whereas higher-level neurons extract more abstract aspects of the number four.
To teach the network, you give it examples of what you’re looking for. The signal propagates forward in the network (like climbing up a building), where each neuron works to fish out something fundamental about the number four.
Like children trying to learn a skill the first time, initially the network doesn’t do so well. It spits out what it thinks a universal number four should look like—think a Picasso-esque rendition.
But here’s where the learning occurs: the algorithm compares the output with the ideal output, and computes the difference between the two (dubbed “error”). This error is then “backpropagated” throughout the entire network, telling each neuron: hey, this is how far off you were, so try adjusting your computation closer to the ideal.
Millions of examples and tweakings later, the network inches closer to the desired output and becomes highly proficient at the trained task.
This error signal is crucial for learning. Without efficient “backprop,” the network doesn’t know which of its neurons are off kilter. By assigning blame, the AI can better itself.
The brain does this too. How? We have no clue.
What’s clear, though, is that the deep learning solution doesn’t work.
Backprop is a pretty needy function. It requires a very specific infrastructure for it to work as expected.
For one, each neuron in the network has to receive the error feedback. But in the brain, neurons are only connected to a few downstream partners (if that). For backprop to work in the brain, early-level neurons need to be able to receive information from billions of connections in their downstream circuits—a biological impossibility.
And while certain deep learning algorithms adapt a more local form of backprop— essentially between neurons—it requires their connection forwards and backwards to be symmetric. This hardly ever occurs in the brain’s synapses.
More recent algorithms adapt a slightly different strategy, in that they implement a separate feedback pathway that helps the neurons to figure out errors locally. While it’s more biologically plausible, the brain doesn’t have a separate computational network dedicated to the blame game.
What it does have are neurons with intricate structures, unlike the uniform “balls” that are currently applied in deep learning.
The team took inspiration from pyramidal cells that populate the human cortex.
“Most of these neurons are shaped like trees, with ‘roots’ deep in the brain and ‘branches’ close to the surface,” says Richards. “What’s interesting is that these roots receive a different set of inputs than the branches that are way up at the top of the tree.”
This is an illustration of a multi-compartment neural network model for deep learning. Left: Reconstruction of pyramidal neurons from mouse primary visual cortex. Right: Illustration of simplified pyramidal neuron models. Image Credit: CIFAR
Curiously, the structure of neurons often turn out be “just right” for efficiently cracking a computational problem. Take the processing of sensations: the bottoms of pyramidal neurons are right smack where they need to be to receive sensory input, whereas the tops are conveniently placed to transmit feedback errors.
Could this intricate structure be evolution’s solution to channeling the error signal?
The team set up a multi-layered neural network based on previous algorithms. But rather than having uniform neurons, they gave those in middle layers—sandwiched between the input and output—compartments, just like real neurons.
When trained with hand-written digits, the algorithm performed much better than a single-layered network, despite lacking a way to perform classical backprop. The cell-like structure itself was sufficient to assign error: the error signals at one end of the neuron are naturally kept separate from input at the other end.
Then, at the right moment, the neuron brings both sources of information together to find the best solution.
There’s some biological evidence for this: neuroscientists have long known that the neuron’s input branches perform local computations, which can be integrated with signals that propagate backwards from the so-called output branch.
However, we don’t yet know if this is the brain’s way of dealing blame—a question that Richards urges neuroscientists to test out.
What’s more, the network parsed the problem in a way eerily similar to traditional deep learning algorithms: it took advantage of its multi-layered structure to extract progressively more abstract “ideas” about each number.
“[This is] the hallmark of deep learning,” the authors explain.
The Deep Learning Brain
Without doubt, there will be more twists and turns to the story as computer scientists incorporate more biological details into AI algorithms.
One aspect that Richards and team are already eyeing is a top-down predictive function, in which signals from higher levels directly influence how lower levels respond to input.
Feedback from upper levels doesn’t just provide error signals; it could also be nudging lower processing neurons towards a “better” activity pattern in real-time, says Richards.
The network doesn’t yet outperform other non-biologically derived (but “brain-inspired”) deep networks. But that’s not the point.
“Deep learning has had a huge impact on AI, but, to date, its impact on neuroscience has been limited,” the authors say.
Now neuroscientists have a lead they could experimentally test: that the structure of neurons underlie nature’s own deep learning algorithm.
“What we might see in the next decade or so is a real virtuous cycle of research between neuroscience and AI, where neuroscience discoveries help us to develop new AI and AI can help us interpret and understand our experimental data in neuroscience,” says Richards.
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