Predictions 2017 – Ed Boal

December 19, 2016

{b}Mainstream AI and chatbots{/b}

Since hitting shelves (real and virtual) in the UK this September, sales of Amazon’s voice-controlled AI assistance products – Echo and Echo Dot – have boomed. These products have brought the hype and promise of applied AI to the masses, combining quality design and integration with (almost) everybody’s favourite online shopping channel, and with a very reasonable price point.

But Amazon has only just scratched the surface. With IoT gradually transitioning from novelty to utility and a pressing social need to increase the efficiency of every function, task and process, 2017 could be the year that AI takes a major leap towards becoming mainstream.

Why only towards becoming mainstream? AI still remains a market of start-ups and early adopters on one end of the spectrum and smartphone manufacturers and the mass market on the other. While an Echo Dot will be in my Christmas stocking this year, I am not sure how the competition and contention between the much-loved AI assistant in my pocket and the new-fangled AI assistant on my coffee table will resolve itself. But one way or another, Alexa or Siri is going to need an icepack!

I am much more certain about the rise of chatbots in 2017. While chatbots have been around for some time and are hugely popular in Asia, 2017’s chatbots will be supercharged with machine learning algorithms which draw on supermassive corpuses of data to deliver a seamless, personalised, experience of communicating with a real human being.

From ordering pizza via Facebook Messenger (see Dominos’ “Dom” The Pizza Bot) to banking (see RBS’ “Luvo” app), chatbots are highly scalable, never need a break (downtime excepted) and should always be polite and friendly (ok, so Tay did not work out for Microsoft – but maybe it will have better luck with Zo). True AI may be a long way off yet, but the chatbots are rising and 2017 may be the first year that we see the displacement (but not redundancy) of humans who would otherwise do certain jobs.

{b}M&A activity{/b}

Depending on what you read, 2017 is either going to be a huge year for tech IPOs (with big names like Dropbox, Pinterest, Slack, Snapchat, Spotify and Uber leading the charge) or the worst since the beginning of the global financial crisis. In any case, all signs point towards strong tech M&A activity in 2017.

Looking at Crunchbase, the number of AI, blockchain and IoT startups must be reaching critical mass (6,000+). Only a small proportion of these start-ups are capable of gaining first-mover advantage. For the rest, acquisition will be an attractive proposition and enable them to secure an exit for equity investors who may believe in the technology and its market potential, but have concerns about their investees’ ability to make it big in a crowded market.

An intensification of M&A activity below the $50m mark seems likely, as non-tech companies seek to innovate and enhance their products and services without reinventing the wheel, and Asian (particularly Chinese) companies with large war chests eye up technologies that will help them to move up the global value chain.

{b}Virtual meets reality{/b}

2016 was the year when VR arguably went from virtual to reality. But 2017 could be the year when virtual meets reality. While VR is undoubtedly cool, it stills feels highly experimental. There are issues with visual fidelity and there are more wires than there really should be – tripping over a cable slightly takes the edge off what is supposed to be an immersive experience. There also seems to be anxiety amongst early adopters that 2016’s headsets and games could be obsolete in a very short period of time – though arguably nothing new there!

Perhaps we will see the return of the video arcade, with traditional games retailers turning empty retail premises into gaming hubs, where those who cannot afford to be early adopters can “have a go”. But given the associations of VR with motion sickness, this could present its own challenges (mop and bucket anyone?)

{b}War on fake and hate{/b}

We all know that information and misinformation co-exist on the Web, but 2016 seems to have been a watershed in terms of the priority and influence of misinformation, particularly in the context of political campaigns. It seems that every few days there has been an article about the (right-wing) manipulation of search engine results, questionable autocomplete suggestions and social engineering.

When Barack Obama calls fake news a threat to democracy, the Pope compares fake news consumption to eating faeces and Angela Merkel expresses her fears, you know the situation must be bad. I think we can expect to see considerable downward pressure on major online service providers to do something about fake news in 2017. But there is a much deeper conversation required around disincentivising the creation of fake news in the first place (ad networks, ahem), technological solutions and educating netizens on how to be more critical and discerning.

2016 also seems to have been a watershed for online hate speech and harassment with the EU Referendum and US Election perhaps creating a perfect storm. With the {European Commission having just published the first evaluation of how IT companies applied the code of conduct to combat illegal online hate speech:}, I think we can expect to see social media companies being held to greater account in 2017, as the European Commission continues its drive to return some sense of civility and order to the Web in the only way it knows how.

{b}Same old, same old{/b}

I have great hopes for the SCL Better Contracts Initiative. What could be better than the collective experience of technology lawyers being harnessed to improve the clarity, utility and navigability of IT contracts? But in the meantime, I expect to spend much fee-earning time in 2017 dancing the same dance around warranties, limitation of liability clauses (my spiel on direct, indirect and consequential losses has been well-rehearsed) and service levels.

{b}{i}Ed Boal is an Associate Solicitor and Deputy Head of the Digital Media & Technology team at Gregg Latchams, committee member of the SCL South West Group and SCL Student Ambassador to the University of Bristol.