All posts in “AI”

Element AI raises $151M on a $600-700M valuation to help companies build and run AI solutions

While tech giants like Google and Amazon build and invest in a multitude of artificial intelligence applications to grow their businesses, a startup has raised a big round of funding to help those that are not technology businesses by nature also jump into the AI fray.

Element AI, the very well-funded, well-connected Canadian startup that has built an AI systems integrator of sorts to help other companies develop and implement artificial intelligence solutions — an ‘Accenture’ for machine learning, neural network-based solutions, computer vision applications, and so on — is today announcing a further 200 million Canadian dollars ($151.3 million) in funding, money that it plans to use to commercialise more of its products, as well as to continue working on R&D, specifically working on new AI solutions.

“Operationalising AI is currently the industry’s toughest challenge, and few companies have been successful at taking proofs-of-concept out of the lab, imbedding them strategically in their operations, and delivering actual business impact,” said Element AI CEO Jean-François (JF) Gagné in a statement. “We are proud to be working with our new partners, who understand this challenge well, and to leverage each other’s expertise in taking AI solutions to market.”

The company did not disclose its valuation in the short statement announcing the funding, nor has it ever talked about it publicly, but PitchBook notes that as of its previous funding round of $102 million back in 2017, it had a post-money valuation of $300 million, a figure a source close to the company confirmed to me. From what I understand the valuation now is between $600 million and $700 million, a mark of how Element AI has grown that’s especially interesting, considering how quiet is has been.

The funding is being led by Caisse de dépôt et placement du Québec (CDPQ), along with participation from McKinsey & Company and its advanced analytics company QuantumBlack; and the Québec government. Previous investors DCVC (Data Collective), Hanwha Asset Management, BDC (Business Development Bank of Canada), Real Ventures and others also participated, with the total raised to date now at C$340 million ($257 million). Other strategic investors in the company have included Microsoft, NVIDIA and Intel.

Element AI was started under an interesting premise that goes something like this: AI is the next major transformational shift — not just in computing, but in how businesses operate. But not every business is a technology business by DNA, and that creates a digital divide of sorts between the companies that can identify a problem that can be fixed by AI and build/invest in the technology to do that; and those that cannot.

Element AI opened for business from the start as a kind of “AI shop” for the latter kinds of enterprises, to help them identify areas where they could build AI solutions to work better, and then build and implement those solutions. Today it offers products in insurance, financial services, manufacturing, logistics and retail — a list that is likely to get longer and deeper with this latest funding.

One catch about Element AI is that company has not been very forthcoming about its customer list up to now — those that have been named as partners include Bank of Canada and Gore Mutual, but there is a very notable absence of case studies or reference customers on its site.

However, from what we understand, this is more a by-product of the companies (both Element AI and its customers) wishing to keep involvement quiet for competitive and other reasons; and in fact there are apparently a number of large enterprises that are building and deploying long-term products working with the startup. We have also been told big investors in this latest round (specifically McKinsey) are bringing in customers of their own by way of this deal, expanding that list. Total bookings are a “significant double digit million number” at the moment.

“With this transaction, we are investing capital and expertise alongside partners who are ideally suited to transform Element AI into a company with a commercial focus that anticipates and creates AI products to address clients’ needs,” said Charles Émond, EVP and Head of Québec Investments and Global Strategic Planning at la Caisse, in a statement. CDPQ launched an AI Fund this year and this is coming out of that fund to help export more of the AI tech and IP that has been incubated and developed in the region. “Through this fund, la Caisse wants to actively contribute to build and strengthen Québec’s global presence in artificial intelligence.”

Management consultancies like McKinsey would be obvious competitors to Element AI, but in fact, they are turning out to be customer pipelines, as traditional system integrators also often lack the deeper expertise needed in newer areas of computing. (And that’s even considering that McKinsey itself has been investing in building its own capabilities, for example through its acquisition of the analytics firm QuantumBlack.

“For McKinsey, this investment is all about helping our clients to further unlock the potential of AI and Machine Learning to improve business performance,” said Patrick Lahaie, Senior Partner and Montreal Managing Partner for McKinsey & Company, in a statement. “We look forward to collaborating closely with the talented team at Element AI in Canada and globally in our shared objective to turn cutting-edge thinking and technology into AI assets which will transform a wide range of industries and sectors. This investment fits into McKinsey’s long-term AI strategy, including the 2015 acquisition of QuantumBlack, which has grown substantially since then and will spearhead the collaboration with Element AI on behalf of our Firm.”

McDonald’s buys voice-based AI to speed up ordering

If you thought we had perfected fast food ordering, think again. McDonald’s is going to drag us all into the future, whether we like it or not.

The golden arched burger empire announced Tuesday that it plans to acquire Apprente, a startup that specializes in speech-based AI technology. The McDonald’s press release claims this will “allow for faster, simpler and more accurate order taking” at its drive-thru kiosks.

Kiosks like this have been more and more common in McDonald's restaurants in recent years.

Kiosks like this have been more and more common in McDonald’s restaurants in recent years.

Image: Horacio Villalobos – Corbis/Corbis via Getty Images

Somewhat crucially, McDonald’s didn’t say how much it’s paying for Apprente. The arches shelled out a whopping $300 million on machine learning firm Dynamic Yield earlier this year, in another move theoretically meant to make ordering more efficient through modern tech.

Apprente’s technology seems hyper-focused on voice-powered customer service applications, so getting bought up by McDonald’s is probably a massive win for them. As Wired explained, Apprente’s speech AI is supposed to work better in the kind of cacophonous environment one might find in a McDonald’s around lunchtime. 

As such, it’s not tough to imagine McDonald’s eventually adding voice ordering to its indoor kiosks down the road. The press release even hinted at the possibility.

It might seem a little goofy for a fast food chain to keep acquiring tech startups, but it’s consistent with the company’s direction over the past few years. McDonald’s has gone all the way in on mobile ordering and kiosks in order to modernize the experience. The company announced a plan to add 1,000 kiosks to its stores every quarter back in 2018.

However, it hasn’t exactly been peachy for everyone. The more futuristic McDonald’s experience has raised the ire of some restaurant workers, citing increased workloads for more complex daily tasks without increased pay.

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Megvii, the Chinese startup unicorn known for facial recognition tech, files to go public in Hong Kong

Megvii Technology, the Beijing-based artificial intelligence startup known in particular for its facial recognition brand Face++, has filed for a public listing on the Hong Kong stock exchange.

Its prospectus did not disclose share pricing or when the IPO will take place, but Reuters reports that the company plans to raise between $500 million and $1 billion and list in the fourth quarter of this year. Megvii’s investors include Alibaba, Ant Financial and the Bank of China. Its last funding round was a Series D of $750 million announced in May that reportedly brought its valuation to more than $4 billion.

Founded by three Tsinghua University graduates in 2011, Megvii is among China’s leading AI startups, with its peers (and rivals) including SenseTime and Yitu. Its clients include Alibaba, Ant Financial, Lenovo, China Mobile and Chinese government entities.

The company’s decision to list in Hong Kong comes against the backdrop of an economic recession and political unrest, including pro-democracy demonstrations, factors that have contributed to a slump in the value of the benchmark Hang Seng index. Last month, Alibaba reportedly decided to postpone its Hong Kong listing until the political and economic environment becomes more favorable.

Megvii’s prospectus discloses both rapid growth in revenue and widening losses, which the company attributes to changes in the fair value of its preferred shares and investment in research and development. Its revenue grew from 67.8 million RMB in 2016 to 1.42 billion RMB in 2018, representing a compound annual growth rate of about 359%. In the first six months of 2019, it made 948.9 million RMB. Between 2016 and 2018, however, its losses increased from 342.8 million RMB to 3.35 billion RMB, and in the first half of this year, Megvii has already lost 5.2 billion RMB.

Investment risks listed by Megvii include high R&D costs, the U.S.-China trade war and negative publicity over facial recognition technology. Earlier this year, Human Rights Watch published a report that linked Face++ to a mobile app used by Chinese police and officials for mass surveillance of Uighurs in Xinjiang, but it later added a correction that said Megvii’s technology had not been used in the app. Megvii’s prospectus alluded to the report, saying that in spite of the correction, the report “still caused significant damages to our reputation which are difficult to completely mitigate.”

The company also said that despite internal measures to prevent misuse of Megvii’s tech, it cannot assure investors that those measures “will always be effective,” and that AI technology’s risks and challenges include “misuse by third parties for inappropriate purposes, for purposes breaching public confidence or even violate applicable laws and regulations in China and other jurisdictions, bias applications or mass surveillance, that could affect user perception, public opinions and their adoption.”

From a macroeconomic perspective, Megvii’s investment risks include the restrictions and tariffs placed on Chinese exports to the U.S. as part of the ongoing trade war. It also cited reports that Megvii is among the Chinese tech companies the U.S. government may add to trade blacklists. “Although we are not aware of, nor have we received any notification, that we have been added as a target of any such restrictions as of the date this Document, the existence of such media reports itself has already damaged our reputation and diverted our management’s attention,” the prospectus said. “Whether or not we will be included as a target for economic and trade restrictions is beyond our control.”

Gmail will fix your shoddy grammar for you using AI

Google will soon improve Gmail’s grammar correction with the help of artificial intelligence, the company announced Tuesday

Instead of having to click on Gmail’s dots menu in the lower right corner and choosing “check spelling” while you write an email, Gmail will start doing it automatically, detecting spelling errors and grammar issues, and even autocorrecting some common spelling mistakes. 

Autocorrect is only available in English — for now. 

The engine powering the feature is the same one Google is using in Docs, where it was introduced in July 2018. You can find out more on how it works here

Gmail will fix your shoddy grammar for you using AI

Image: Google

Grammar checks and autocorrect will be switched on by default, but users will be able to disable it in Gmail’s settings. 

The feature is coming to G Suite, meaning it will initially only be available to enterprise Gmail users. There’s no word on when it may be expanded to cover all Gmail users. 

Google will be rolling out this new feature to G Suite users gradually over the next weeks. It will be available to all G Suite editions. 

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YC’s Earth AI closes funding for its platform to make mining less wasteful

Discovering and drilling for the important minerals used for industry and the technology sector remains incredibly important as existing mines are becoming depleted. If the mining industry can’t become more efficient at finding these important deposits, then more unnecessary, harmful drilling and exploration takes place. Applying AI to this problem would seem like a no-brainer for the environment.

Andreessen Horowitz knows this, as they invested in KoBold Metals. GoldSpot Discoveries is a competitor.

Joining this field is now Earth AI, a mineral targeting startup which is using AI to predict the location of new ore bodies far more cheaply, faster, and with more precision (it claims) than previous methods.

It’s now closed a funding round of ‘up to’ $2.5 million from Gagarin Capital, A VC firm specializing in AI, and Y Combinator, in the latter’s latest cohort announced this week. Previously, Earth AI had raised $1.7 million in two seed rounds from Australian VCs, AirTree Ventures and Blackbird Ventures and angel investors.

The startup uses machine learning techniques on global data, including remote sensing, radiometry, geophysical and geochemical datasets, to learn the data signatures related to industrial metal deposits (from gold, copper, and lead to rare earth elements), train a neural network, and predict where high-value mineral prospects will be.

In particular, it was used to discover a deposit of Vanadium, which is used to build Vanadium Redox Batteries that are used in large industrial applications. Finding these deposits faster using AI means the planet will thus benefit faster from battery technology.

In 2018, Earth AI field-tested remote unexplored areas and claims to have generated a 50X better success rate than traditional exploration methods, while spending on average $11,000 per prospect discovery. In Australia, for instance, companies often spend several million dollars to arrive at the same result.

Jared Friedman, YCombinator partner comented in a statement: “The possibility of discovering new mineral deposits with AI is a fascinating and thought-provoking idea. Earth AI has the potential not just to become an incredibly profitable company, but to reduce the cost of the metals we need to build our civilization, and that has huge implications for the world.”

“Earth AI is taking a novel approach to a large and important industry — and that approach is already showing tremendous promise”, Mikhail Taver, partner at Gagarin Capital said.

Earth AI was founded by Roman Tesyluk, a geoscientist with eight years of mineral exploration and academic experience. Prior to starting Earth AI, he was a PhD Candidate at The University of Sydney, Australia and obtained a Master’s degree in Geology from Ivan Franko University, Ukraine. “EARTH AI has huge ambitions, and this funding round will supercharge us towards reaching our milestones,” he said.

This latest investment from Gagarin Capital joins a line of other AI-based products and services and investments it’s made into YC companies, such as Wallarm, Gosu.AI and CureSkin. Gagarin’s exits include MSQRD (acquired by Facebook), and AIMatter (acquired by Google).