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#433696 3 Big Ways Tech Is Disrupting Global ...

Disruptive business models are often powered by alternative financing. In Part 1 of this series, I discussed how mobile is redefining money and banking and shared some of the dramatic transformations in the global remittance infrastructure.

In this article, we’ll discuss:

Peer-to-peer lending
AI financial advisors and robo traders
Seamless Transactions

Let’s dive right back in…

Decentralized Lending = Democratized Access to Finances
Peer-to-peer (P2P) lending is an age-old practice, traditionally with high risk and extreme locality. Now, the P2P funding model is being digitized and delocalized, bringing lending online and across borders.

Zopa, the first official crowdlending platform, arrived in the United Kingdom in 2004. Since then, the consumer crowdlending platform has facilitated lending of over 3 billion euros ($3.5 billion USD) of loans.

Person-to-business crowdlending took off, again in the U.K., in 2005 with Funding Circle, now with over 5 billion euros (~5.8 billion USD) of capital loaned to small businesses around the world.

Crowdlending next took off in the US in 2006, with platforms like Prosper and Lending Club. The US crowdlending industry has boomed to $21 billion in loans, across 515,000 loans.

Let’s take a step back… to a time before banks, when lending took place between trusted neighbors in small villages across the globe. Lending started as peer-to-peer transactions.

As villages turned into towns, towns turned into cities, and cities turned into sprawling metropolises, neighborly trust and the ability to communicate across urban landscapes broke down. That’s where banks and other financial institutions came into play—to add trust back into the lending equation.

With crowdlending, we are evidently returning to this pre-centralized-banking model of loans, and moving away from cumbersome intermediaries (e.g. high fees, regulations, and extra complexity).

Fueled by the permeation of the internet, P2P lending took on a new form as ‘crowdlending’ in the early 2000s. Now, as blockchain and artificial intelligence arrive on the digital scene, P2P lending platforms are being overhauled with transparency, accountability, reliability, and immutability.

Artificial Intelligence Micro Lending & Credit Scores
We are beginning to augment our quantitative decision-making with neural networks processing borrowers’ financial data to determine their financial ‘fate’ (or, as some call it, your credit score). Companies like Smart Finance Group (backed by Kai Fu Lee and Sinovation Ventures) are using artificial intelligence to minimize default rates for tens of millions of microloans.

Smart Finance is fueled by users’ personal data, particularly smartphone data and usage behavior. Users are required to give Smart Finance access to their smartphone data, so that Smart Finance’s artificial intelligence engine can generate a credit score from the personal information.

The benefits of this AI-powered lending platform do not stop at increased loan payback rates; there’s a massive speed increase as well. Smart Finance loans are frequently approved in under eight seconds. As we’ve seen with other artificial intelligence disruptions, data is the new gold.

Digitizing access to P2P loans paves the way for billions of people currently without access to banking to leapfrog the centralized banking system, just as Africa bypassed landline phones and went straight to mobile. Leapfrogging centralized banking and the credit system is exactly what Smart Finance has done for hundreds of millions of people in China.

Blockchain-Backed Crowdlending
As artificial intelligence accesses even the most mundane mobile browsing data to assign credit scores, blockchain technologies, particularly immutable ledgers and smart contracts, are massive disruptors to the archaic banking system, building additional trust and transparency on top of current P2P lending models.

Immutable ledgers provide the necessary transparency for accurate credit and loan defaulting history. Smart contracts executed on these immutable ledgers bring the critical ability to digitally replace cumbersome, expensive third parties (like banks), allowing individual borrowers or businesses to directly connect with willing lenders.

Two of the leading blockchain platforms for P2P lending are ETHLend and SALT Lending.

ETHLend is an Ethereum-based decentralized application aiming to bring transparency and trust to P2P lending through Ethereum network smart contracts.

Secure Automated Lending Technology (SALT) allows cryptocurrency asset holders to use their digital assets as collateral for cash loans, without the need to liquidate their holdings, giving rise to a digital-asset-backed lending market.

While blockchain poses a threat to many of the large, centralized banking institutions, some are taking advantage of the new technology to optimize their internal lending, credit scoring, and collateral operations.

In March 2018, ING and Credit Suisse successfully exchanged 25 million euros using HQLA-X, a blockchain-based collateral lending platform.

HQLA-X runs on the R3 Corda blockchain, a platform designed specifically to help heritage financial and commerce institutions migrate away from their inefficient legacy financial infrastructure.

Blockchain and tokenization are going through their own fintech and regulation shakeup right now. In a future blog, I’ll discuss the various efforts to more readily assure smart contracts, and the disruptive business model of security tokens and the US Securities and Exchange Commission.

Parallels to the Global Abundance of Capital
The abundance of capital being created by the advent of P2P loans closely relates to the unprecedented global abundance of capital.

Initial coin offerings (ICOs) and crowdfunding are taking a strong stand in disrupting the $164 billion venture capital market. The total amount invested in ICOs has risen from $6.6 billion in 2017 to $7.15 billion USD in the first half of 2018. Crowdfunding helped projects raise more than $34 billion in 2017, with experts projecting that global crowdfunding investments will reach $300 billion by 2025.

In the last year alone, using ICOs, over a dozen projects have raised hundreds of millions of dollars in mere hours. Take Filecoin, for example, which raised $257 million  in only 30 days; its first $135 million was raised in the first hour. Similarly, the Dragon Coin project (which itself is revolutionizing remittance in high-stakes casinos around the world) raised $320 million in its 30-day public ICO.

Some Important Takeaways…

Technology-backed fundraising and financial services are disrupting the world’s largest financial institutions. Anyone, anywhere, at anytime will be able to access the capital they need to pursue their idea.

The speed at which we can go from “I’ve got an idea” to “I run a billion-dollar company” is moving faster than ever.

Following Ray Kurzweil’s Law of Accelerating Returns, the rapid decrease in time to access capital is intimately linked (and greatly dependent on) a financial infrastructure (technology, institutions, platforms, and policies) that can adapt and evolve just as rapidly.

This new abundance of capital requires financial decision-making with ever-higher market prediction precision. That’s exactly where artificial intelligence is already playing a massive role.

Artificial Intelligence, Robo Traders, and Financial Advisors
On May 6, 2010, the Dow Jones Industrial Average suddenly collapsed by 998.5 points (equal to 8 percent, or $1 trillion). The crash lasted over 35 minutes and is now known as the ‘Flash Crash’. While no one knows the specific reason for this 2010 stock market anomaly, experts widely agree that the Flash Crash had to do with algorithmic trading.

With the ability to have instant, trillion-dollar market impacts, algorithmic trading and artificial intelligence are undoubtedly ingrained in how financial markets operate.

In 2017, CNBC.com estimated that 90 percent of daily trading volume in stock trading is done by machine algorithms, and only 10 percent is carried out directly by humans.

Artificial intelligence and financial management algorithms are not only available to top Wall Street players.

Robo-advisor financial management apps, like Wealthfront and Betterment, are rapidly permeating the global market. Wealthfront currently has $9.5 billion in assets under management, and Betterment has $10 billion.

Artificial intelligent financial agents are already helping financial institutions protect your money and fight fraud. A prime application for machine learning is in detecting anomalies in your spending and transaction habits, and flagging potentially fraudulent transactions.

As artificial intelligence continues to exponentially increase in power and capabilities, increasingly powerful trading and financial management bots will come online, finding massive new and previously lost streams of wealth.

How else are artificial intelligence and automation transforming finance?

Disruptive Remittance and Seamless Transactions
When was the last time you paid in cash at a toll booth? How about for a taxi ride?

EZ-Pass, the electronic tolling company implemented extensively on the East Coast, has done wonders to reduce traffic congestion and increase traffic flow.

Driving down I-95 on the East Coast of the United States, drivers rarely notice their financial transaction with the state’s tolling agencies. The transactions are seamless.

The Uber app enables me to travel without my wallet. I can forget about payment on my trip, free up my mental bandwidth and time for higher-priority tasks. The entire process is digitized and, by extension, automated and integrated into Uber’s platform (Note: This incredible convenience many times causes me to accidentally walk out of taxi cabs without paying!).

In January 2018, we saw the success of the first cutting-edge, AI-powered Amazon Go store open in Seattle, Washington. The store marked a new era in remittance and transactions. Gone are the days of carrying credit cards and cash, and gone are the cash registers. And now, on the heals of these early ‘beta-tests’, Amazon is considering opening as many as 3,000 of these cashierless stores by 2023.

Amazon Go stores use AI algorithms that watch various video feeds (from advanced cameras) throughout the store to identify who picks up groceries, exactly what products they select, and how much to charge that person when they walk out of the store. It’s a grab and go experience.

Let’s extrapolate the notion of seamless, integrated payment systems from Amazon Go and Uber’s removal of post-ride payment to the rest of our day-to-day experience.

Imagine this near future:

As you near the front door of your home, your AI assistant summons a self-driving Uber that takes you to the Hyperloop station (after all, you work in L.A. but live in San Francisco).

At the station, you board your pod, without noticing that your ticket purchase was settled via a wireless payment checkpoint.

After work, you stop at the Amazon Go and pick up dinner. Your virtual AI assistant passes your Amazon account information to the store’s payment checkpoint, as the store’s cameras and sensors track you, your cart and charge you auto-magically.

At home, unbeknownst to you, your AI has already restocked your fridge and pantry with whatever items you failed to pick up at the Amazon Go.

Once we remove the actively transacting aspect of finance, what else becomes possible?

Top Conclusions
Extraordinary transformations are happening in the finance world. We’ve only scratched the surface of the fintech revolution. All of these transformative financial technologies require high-fidelity assurance, robust insurance, and a mechanism for storing value.

I’ll dive into each of these other facets of financial services in future articles.

For now, thanks to coming global communication networks being deployed on 5G, Alphabet’s LUNE, SpaceX’s Starlink and OneWeb, by 2024, nearly all 8 billion people on Earth will be online.

Once connected, these new minds, entrepreneurs, and customers need access to money and financial services to meaningfully participate in the world economy.

By connecting lenders and borrowers around the globe, decentralized lending drives down global interest rates, increases global financial market participation, and enables economic opportunity to the billions of people who are about to come online.

We’re living in the most abundant time in human history, and fintech is just getting started.

Join Me
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#433689 The Rise of Dataism: A Threat to Freedom ...

What would happen if we made all of our data public—everything from wearables monitoring our biometrics, all the way to smartphones monitoring our location, our social media activity, and even our internet search history?

Would such insights into our lives simply provide companies and politicians with greater power to invade our privacy and manipulate us by using our psychological profiles against us?

A burgeoning new philosophy called dataism doesn’t think so.

In fact, this trending ideology believes that liberating the flow of data is the supreme value of the universe, and that it could be the key to unleashing the greatest scientific revolution in the history of humanity.

What Is Dataism?
First mentioned by David Brooks in his 2013 New York Times article “The Philosophy of Data,” dataism is an ethical system that has been most heavily explored and popularized by renowned historian, Yuval Noah Harari.

In his 2016 book Homo Deus, Harari described dataism as a new form of religion that celebrates the growing importance of big data.

Its core belief centers around the idea that the universe gives greater value and support to systems, individuals, and societies that contribute most heavily and efficiently to data processing. In an interview with Wired, Harari stated, “Humans were special and important because up until now they were the most sophisticated data processing system in the universe, but this is no longer the case.”

Now, big data and machine learning are proving themselves more sophisticated, and dataists believe we should hand over as much information and power to these algorithms as possible, allowing the free flow of data to unlock innovation and progress unlike anything we’ve ever seen before.

Pros: Progress and Personal Growth
When you let data run freely, it’s bound to be mixed and matched in new ways that inevitably spark progress. And as we enter the exponential future where every person is constantly connected and sharing their data, the potential for such collaborative epiphanies becomes even greater.

We can already see important increases in quality of life thanks to companies like Google. With Google Maps on your phone, your position is constantly updating on their servers. This information, combined with everyone else on the planet using a phone with Google Maps, allows your phone to inform you of traffic conditions. Based on the speed and location of nearby phones, Google can reroute you to less congested areas or help you avoid accidents. And since you trust that these algorithms have more data than you, you gladly hand over your power to them, following your GPS’s directions rather than your own.

We can do the same sort of thing with our bodies.

Imagine, for instance, a world where each person has biosensors in their bloodstreams—a not unlikely or distant possibility when considering diabetic people already wear insulin pumps that constantly monitor their blood sugar levels. And let’s assume this data was freely shared to the world.

Now imagine a virus like Zika or the Bird Flu breaks out. Thanks to this technology, the odd change in biodata coming from a particular region flags an artificial intelligence that feeds data to the CDC (Center for Disease Control and Prevention). Recognizing that a pandemic could be possible, AIs begin 3D printing vaccines on-demand, predicting the number of people who may be afflicted. When our personal AIs tell us the locations of the spreading epidemic and to take the vaccine it just delivered by drone to our homes, are we likely to follow its instructions? Almost certainly—and if so, it’s likely millions, if not billions, of lives will have been saved.

But to quickly create such vaccines, we’ll also need to liberate research.

Currently, universities and companies seeking to benefit humankind with medical solutions have to pay extensively to organize clinical trials and to find people who match their needs. But if all our biodata was freely aggregated, perhaps they could simply say “monitor all people living with cancer” to an AI, and thanks to the constant stream of data coming in from the world’s population, a machine learning program may easily be able to detect a pattern and create a cure.

As always in research, the more sample data you have, the higher the chance that such patterns will emerge. If data is flowing freely, then anyone in the world can suddenly decide they have a hunch they want to explore, and without having to spend months and months of time and money hunting down the data, they can simply test their hypothesis.

Whether garage tinkerers, at-home scientists, or PhD students—an abundance of free data allows for science to progress unhindered, each person able to operate without being slowed by lack of data. And any progress they make is immediately liberated, becoming free data shared with anyone else that may find a use for it.

Any individual with a curious passion would have the entire world’s data at their fingertips, empowering every one of us to become an expert in any subject that inspires us. Expertise we can then share back into the data stream—a positive feedback loop spearheading progress for the entirety of humanity’s knowledge.

Such exponential gains represent a dataism utopia.

Unfortunately, our current incentives and economy also show us the tragic failures of this model.

As Harari has pointed out, the rise of datism means that “humanism is now facing an existential challenge and the idea of ‘free will’ is under threat.”

Cons: Manipulation and Extortion
In 2017, The Economist declared that data was the most valuable resource on the planet—even more valuable than oil.

Perhaps this is because data is ‘priceless’: it represents understanding, and understanding represents control. And so, in the world of advertising and politics, having data on your consumers and voters gives you an incredible advantage.

This was evidenced by the Cambridge Analytica scandal, in which it’s believed that Donald Trump and the architects of Brexit leveraged users’ Facebook data to create psychological profiles that enabled them to manipulate the masses.

How powerful are these psychological models?

A team who built a model similar to that used by Cambridge Analytica said their model could understand someone as well as a coworker with access to only 10 Facebook likes. With 70 likes they could know them as well as a friend might, 150 likes to match their parents’ understanding, and at 300 likes they could even come to know someone better than their lovers. With more likes, they could even come to know someone better than that person knows themselves.

Proceeding With Caution
In a capitalist democracy, do we want businesses and politicians to know us better than we know ourselves?

In spite of the remarkable benefits that may result for our species by freely giving away our information, do we run the risk of that data being used to exploit and manipulate the masses towards a future without free will, where our daily lives are puppeteered by those who own our data?

It’s extremely possible.

And it’s for this reason that one of the most important conversations we’ll have as a species centers around data ownership: do we just give ownership of the data back to the users, allowing them to choose who to sell or freely give their data to? Or will that simply deter the entrepreneurial drive and cause all of the free services we use today, like Google Search and Facebook, to begin charging inaccessible prices? How much are we willing to pay for our freedom? And how much do we actually care?

If recent history has taught us anything, it’s that humans are willing to give up more privacy than they like to think. Fifteen years ago, it would have been crazy to suggest we’d all allow ourselves to be tracked by our cars, phones, and daily check-ins to our favorite neighborhood locations; but now most of us see it as a worthwhile trade for optimized commutes and dating. As we continue navigating that fine line between exploitation and innovation into a more technological future, what other trade-offs might we be willing to make?

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#433668 A Decade of Commercial Space ...

In many industries, a decade is barely enough time to cause dramatic change unless something disruptive comes along—a new technology, business model, or service design. The space industry has recently been enjoying all three.

But 10 years ago, none of those innovations were guaranteed. In fact, on Sept. 28, 2008, an entire company watched and hoped as their flagship product attempted a final launch after three failures. With cash running low, this was the last shot. Over 21,000 kilograms of kerosene and liquid oxygen ignited and powered two booster stages off the launchpad.

This first official picture of the Soviet satellite Sputnik I was issued in Moscow Oct. 9, 1957. The satellite measured 1 foot, 11 inches and weighed 184 pounds. The Space Age began as the Soviet Union launched Sputnik, the first man-made satellite, into orbit, on Oct. 4, 1957.AP Photo/TASS
When that Falcon 1 rocket successfully reached orbit and the company secured a subsequent contract with NASA, SpaceX had survived its ‘startup dip’. That milestone, the first privately developed liquid-fueled rocket to reach orbit, ignited a new space industry that is changing our world, on this planet and beyond. What has happened in the intervening years, and what does it mean going forward?

While scientists are busy developing new technologies that address the countless technical problems of space, there is another segment of researchers, including myself, studying the business angle and the operations issues facing this new industry. In a recent paper, my colleague Christopher Tang and I investigate the questions firms need to answer in order to create a sustainable space industry and make it possible for humans to establish extraterrestrial bases, mine asteroids and extend space travel—all while governments play an increasingly smaller role in funding space enterprises. We believe these business solutions may hold the less-glamorous key to unlocking the galaxy.

The New Global Space Industry
When the Soviet Union launched their Sputnik program, putting a satellite in orbit in 1957, they kicked off a race to space fueled by international competition and Cold War fears. The Soviet Union and the United States played the primary roles, stringing together a series of “firsts” for the record books. The first chapter of the space race culminated with Neil Armstrong and Buzz Aldrin’s historic Apollo 11 moon landing which required massive public investment, on the order of US$25.4 billion, almost $200 billion in today’s dollars.

Competition characterized this early portion of space history. Eventually, that evolved into collaboration, with the International Space Station being a stellar example, as governments worked toward shared goals. Now, we’ve entered a new phase—openness—with private, commercial companies leading the way.

The industry for spacecraft and satellite launches is becoming more commercialized, due, in part, to shrinking government budgets. According to a report from the investment firm Space Angels, a record 120 venture capital firms invested over $3.9 billion in private space enterprises last year. The space industry is also becoming global, no longer dominated by the Cold War rivals, the United States and USSR.

In 2018 to date, there have been 72 orbital launches, an average of two per week, from launch pads in China, Russia, India, Japan, French Guinea, New Zealand, and the US.

The uptick in orbital launches of actual rockets as well as spacecraft launches, which includes satellites and probes launched from space, coincides with this openness over the past decade.

More governments, firms and even amateurs engage in various spacecraft launches than ever before. With more entities involved, innovation has flourished. As Roberson notes in Digital Trends, “Private, commercial spaceflight. Even lunar exploration, mining, and colonization—it’s suddenly all on the table, making the race for space today more vital than it has felt in years.”

Worldwide launches into space. Orbital launches include manned and unmanned spaceships launched into orbital flight from Earth. Spacecraft launches include all vehicles such as spaceships, satellites and probes launched from Earth or space. Wooten, J. and C. Tang (2018) Operations in space, Decision Sciences; Space Launch Report (Kyle 2017); Spacecraft Encyclopedia (Lafleur 2017), CC BY-ND

One can see this vitality plainly in the news. On Sept. 21, Japan announced that two of its unmanned rovers, dubbed Minerva-II-1, had landed on a small, distant asteroid. For perspective, the scale of this landing is similar to hitting a 6-centimeter target from 20,000 kilometers away. And earlier this year, people around the world watched in awe as SpaceX’s Falcon Heavy rocket successfully launched and, more impressively, returned its two boosters to a landing pad in a synchronized ballet of epic proportions.

Challenges and Opportunities
Amidst the growth of capital, firms, and knowledge, both researchers and practitioners must figure out how entities should manage their daily operations, organize their supply chain, and develop sustainable operations in space. This is complicated by the hurdles space poses: distance, gravity, inhospitable environments, and information scarcity.

One of the greatest challenges involves actually getting the things people want in space, into space. Manufacturing everything on Earth and then launching it with rockets is expensive and restrictive. A company called Made In Space is taking a different approach by maintaining an additive manufacturing facility on the International Space Station and 3D printing right in space. Tools, spare parts, and medical devices for the crew can all be created on demand. The benefits include more flexibility and better inventory management on the space station. In addition, certain products can be produced better in space than on Earth, such as pure optical fiber.

How should companies determine the value of manufacturing in space? Where should capacity be built and how should it be scaled up? The figure below breaks up the origin and destination of goods between Earth and space and arranges products into quadrants. Humans have mastered the lower left quadrant, made on Earth—for use on Earth. Moving clockwise from there, each quadrant introduces new challenges, for which we have less and less expertise.

A framework of Earth-space operations. Wooten, J. and C. Tang (2018) Operations in Space, Decision Sciences, CC BY-ND
I first became interested in this particular problem as I listened to a panel of robotics experts discuss building a colony on Mars (in our third quadrant). You can’t build the structures on Earth and easily send them to Mars, so you must manufacture there. But putting human builders in that extreme environment is equally problematic. Essentially, an entirely new mode of production using robots and automation in an advance envoy may be required.

Resources in Space
You might wonder where one gets the materials for manufacturing in space, but there is actually an abundance of resources: Metals for manufacturing can be found within asteroids, water for rocket fuel is frozen as ice on planets and moons, and rare elements like helium-3 for energy are embedded in the crust of the moon. If we brought that particular isotope back to Earth, we could eliminate our dependence on fossil fuels.

As demonstrated by the recent Minerva-II-1 asteroid landing, people are acquiring the technical know-how to locate and navigate to these materials. But extraction and transport are open questions.

How do these cases change the economics in the space industry? Already, companies like Planetary Resources, Moon Express, Deep Space Industries, and Asterank are organizing to address these opportunities. And scholars are beginning to outline how to navigate questions of property rights, exploitation and partnerships.

Threats From Space Junk
A computer-generated image of objects in Earth orbit that are currently being tracked. Approximately 95 percent of the objects in this illustration are orbital debris – not functional satellites. The dots represent the current location of each item. The orbital debris dots are scaled according to the image size of the graphic to optimize their visibility and are not scaled to Earth. NASA
The movie “Gravity” opens with a Russian satellite exploding, which sets off a chain reaction of destruction thanks to debris hitting a space shuttle, the Hubble telescope, and part of the International Space Station. The sequence, while not perfectly plausible as written, is a very real phenomenon. In fact, in 2013, a Russian satellite disintegrated when it was hit with fragments from a Chinese satellite that exploded in 2007. Known as the Kessler effect, the danger from the 500,000-plus pieces of space debris has already gotten some attention in public policy circles. How should one prevent, reduce or mitigate this risk? Quantifying the environmental impact of the space industry and addressing sustainable operations is still to come.

NASA scientist Mark Matney is seen through a fist-sized hole in a 3-inch thick piece of aluminum at Johnson Space Center’s orbital debris program lab. The hole was created by a thumb-size piece of material hitting the metal at very high speed simulating possible damage from space junk. AP Photo/Pat Sullivan
What’s Next?
It’s true that space is becoming just another place to do business. There are companies that will handle the logistics of getting your destined-for-space module on board a rocket; there are companies that will fly those rockets to the International Space Station; and there are others that can make a replacement part once there.

What comes next? In one sense, it’s anybody’s guess, but all signs point to this new industry forging ahead. A new breakthrough could alter the speed, but the course seems set: exploring farther away from home, whether that’s the moon, asteroids, or Mars. It’s hard to believe that 10 years ago, SpaceX launches were yet to be successful. Today, a vibrant private sector consists of scores of companies working on everything from commercial spacecraft and rocket propulsion to space mining and food production. The next step is working to solidify the business practices and mature the industry.

Standing in a large hall at the University of Pittsburgh as part of the White House Frontiers Conference, I see the future. Wrapped around my head are state-of-the-art virtual reality goggles. I’m looking at the surface of Mars. Every detail is immediate and crisp. This is not just a video game or an aimless exercise. The scientific community has poured resources into such efforts because exploration is preceded by information. And who knows, maybe 10 years from now, someone will be standing on the actual surface of Mars.

Image Credit: SpaceX

Joel Wooten, Assistant Professor of Management Science, University of South Carolina

This article is republished from The Conversation under a Creative Commons license. Read the original article. Continue reading

Posted in Human Robots

#433386 What We Have to Gain From Making ...

The borders between the real world and the digital world keep crumbling, and the latter’s importance in both our personal and professional lives keeps growing. Some describe the melding of virtual and real worlds as part of the fourth industrial revolution. Said revolution’s full impact on us as individuals, our companies, communities, and societies is still unknown.

Greg Cross, chief business officer of New Zealand-based AI company Soul Machines, thinks one inescapable consequence of these crumbling borders is people spending more and more time interacting with technology. In a presentation at Singularity University’s Global Summit in San Francisco last month, Cross unveiled Soul Machines’ latest work and shared his views on the current state of human-like AI and where the technology may go in the near future.

Humanizing Technology Interaction
Cross started by introducing Rachel, one of Soul Machines’ “emotionally responsive digital humans.” The company has built 15 different digital humans of various sexes, groups, and ethnicities. Rachel, along with her “sisters” and “brothers,” has a virtual nervous system based on neural networks and biological models of different paths in the human brain. The system is controlled by virtual neurotransmitters and hormones akin to dopamine, serotonin, and oxytocin, which influence learning and behavior.

As a result, each digital human can have its own unique set of “feelings” and responses to interactions. People interact with them via visual and audio sensors, and the machines respond in real time.

“Over the last 20 or 30 years, the way we think about machines and the way we interact with machines has changed,” Cross said. “We’ve always had this view that they should actually be more human-like.”

The realism of the digital humans’ graphic representations comes thanks to the work of Soul Machines’ other co-founder, Dr. Mark Sager, who has won two Academy Awards for his work on some computer-generated movies, including James Cameron’s Avatar.

Cross pointed out, for example, that rather than being unrealistically flawless and clear, Rachel’s skin has blemishes and sun spots, just like real human skin would.

The Next Human-Machine Frontier
When people interact with each other face to face, emotional and intellectual engagement both heavily influence the interaction. What would it look like for machines to bring those same emotional and intellectual capacities to our interactions with them, and how would this type of interaction affect the way we use, relate to, and feel about AI?

Cross and his colleagues believe that humanizing artificial intelligence will make the technology more useful to humanity, and prompt people to use AI in more beneficial ways.

“What we think is a very important view as we move forward is that these machines can be more helpful to us. They can be more useful to us. They can be more interesting to us if they’re actually more like us,” Cross said.

It is an approach that seems to resonate with companies and organizations. For example, in the UK, where NatWest Bank is testing out Cora as a digital employee to help answer customer queries. In Germany, Daimler Financial Group plans to employ Sarah as something “similar to a personal concierge” for its customers. According to Cross, Daimler is looking at other ways it could deploy digital humans across the organization, from building digital service people, digital sales people, and maybe in the future, digital chauffeurs.

Soul Machines’ latest creation is Will, a digital teacher that can interact with children through a desktop, tablet, or mobile device and help them learn about renewable energy. Cross sees other social uses for digital humans, including potentially serving as doctors to rural communities.

Our Digital Friends—and Twins
Soul Machines is not alone in its quest to humanize technology. It is a direction many technology companies, including the likes of Amazon, also seem to be pursuing. Amazon is working on building a home robot that, according to Bloomberg, “could be a sort of mobile Alexa.”

Finding a more human form for technology seems like a particularly pervasive pursuit in Japan. Not just when it comes to its many, many robots, but also virtual assistants like Gatebox.

The Japanese approach was perhaps best summed up by famous android researcher Dr. Hiroshi Ishiguro, who I interviewed last year: “The human brain is set up to recognize and interact with humans. So, it makes sense to focus on developing the body for the AI mind, as well as the AI. I believe that the final goal for both Japanese and other companies and scientists is to create human-like interaction.”

During Cross’s presentation, Rob Nail, CEO and associate founder of Singularity University, joined him on the stage, extending an invitation to Rachel to be SU’s first fully digital faculty member. Rachel accepted, and though she’s the only digital faculty right now, she predicted this won’t be the case for long.

“In 10 years, all of you will have digital versions of yourself, just like me, to take on specific tasks and make your life a whole lot easier,” she said. “This is great news for me. I’ll have millions of digital friends.”

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Posted in Human Robots

#432876 Walking robots, a YouTube sensation, get ...

A robotics company known for its widely shared videos of nimble, legged robots opening doors or walking through rough terrain is preparing to sell some after years of research. Continue reading

Posted in Human Robots