The Five Forces That Change Everything by Steven S. Hoffman

Author:Steven S. Hoffman
Language: eng
Format: epub
ISBN: 9781953295422
Publisher: BenBella Books
Published: 2021-05-30T00:00:00+00:00

AI FORTUNE-TELLERS: THE PREDICTION MACHINES

Homo sapiens are better at modeling and predicting possible future scenarios than any other species on the planet. But now our intelligent machines are poised to make us look like chimps. AI’s ability to consider massive amounts of data far surpasses ours, and that means a computer’s ability to gaze into the future and determine what may happen has the potential to disrupt entire industries and reconfigure our lives.

Amazon is using its massive amount of data to algorithmically automate every aspect of its business, including predicting what people will buy. For instance, Amazon can use statistical models to predict how many Gillette razorblades will sell in Chicago next Tuesday, enabling it to ship those products in advance. This is how Amazon can avoid overnight shipping costs and pass those savings along to its customers, who want to receive their orders the very next day. Of course, this works best for high-volume products. The greater the volume, the more accurate these predictions.

Amazon’s ultimate mission is to sell its customers products even before they know they need them. How will Amazon accomplish this? It all comes back to the data. Using smart devices like Alexa, as well as data from online and offline shopping, Amazon is seeking to learn and model each individual’s buying habits. Once Amazon has enough data, the next step would be for it to begin shipping products to individuals even before they place their orders. Imagine having an Amazon package arrive on your doorstep, and when you open it, inside are the products you were thinking of ordering. If you don’t want some of them, you can send them back free of charge.

Amazon will be able to afford to do this as soon as its machine-learning algorithms can become accurate enough to make this profitable. In preparation, Amazon is automating its entire supply chain, from warehouses to the doorstep. The lower the cost of shipping, the more returns it can afford to accept. To accomplish this, it needs to take human labor out of the loop.

Someday, Amazon’s warehouses, delivery vehicles, and everything in between will be autonomous. Once this is in place, the cost of customers rejecting an order will be minimal, and Amazon can commence with sending products in advance of ordering. In other words, Amazon wants to take the buying decision out of buying, by automating every step of the process. If its customers stop shopping for products, they aren’t searching for the best price online and won’t be visiting competing stores. Over the long run, this will prove incredibly profitable for Amazon, while saving customers the time and hassle of shopping.

Google’s DeepMind has developed software to predict the likelihood of cardiovascular problems, like heart attacks and strokes, simply from images of the retina, with no blood draws or other tests necessary. It won’t be long before there’s a wearable device that can tell you to head to the hospital because you’re likely to have a heart attack within the next few weeks or to take a certain medicine within the next twenty-four hours to avoid having a stroke.

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