The AI breakthrough nobody is talking about

AI visualization

This year has been a whirlwind, with a global pandemic, an international trade war, and rising global tension combining with a wave of isolationism that has created a perfect storm of economic damage. It has also been a whirlwind of a year for another reason: the development of Open-AI's GPT-3. Mark my words, even though you probably haven't heard of it yet, GPT-3's development is a turning point in AI worldwide.

Why is GPT-3 so important? In testing, human readers were able to discern that an article was written by GPT-3 only 52% of the time, which might seem unimportant until you realize that level is just 2% above random guessing. Already a small section of the internet is having a meltdown (while the rest, interestingly, seems largely unaware). As an experiment, one blogger decided to create an entire blog using only GPT-3 generated content, without its readership's knowledge. That blog garnered over 26,000 views in just under 2 weeks, and the only people who caught on were actually derided in the comments for trying to imply the author was a bot.

So, what is GPT-3, and how does it relate to the Israeli business scene, beyond the obvious, 'They are both vaguely technologically related'?

To answer this question, we must first understand what GPT-3 is: an auto-complete engine, much like the one employed by google, only many orders of magnitude smarter. All the AI does is complete text. So if I were to write, say, the beginning of this blog post and submit it to GPT-3, it would attempt to complete the blog, writing in my same style and trying to bring the entire piece to a logical stopping point (no worries, I did not do have access to GPT-3, nor did I use it to write this post). To teach GPT-3 how to do this, OpenAI ran a sea of training data through a self-teaching algorithm loosely analogous to the human brain (they don't call these systems 'neural networks' for nothing) using a mind numbing number of GPUs.

What is amazing about this breakthrough is that, for so many years, AI has seemed just around the corner, while never quite materializing. This has led to suppressed investment relative to its future value, and fears of a looming bubble. Now, with an AI that is largely able to pass the turing test and even able to code, investors are scrambling to get seats at the table.

Of note, Nvidia, which has already risen by nearly 200% in the past year, has jumped another 50% just in the last three months. Additionally, their lead competitor in the GPU market, AMD, also has jumped more than 50% in the last three months.

For Israel, this news is pretty huge. Both GPU manufacturers have large R&D centers in Israel, and perhaps more importantly, Habana Labs, which was acquired by Intel last year for $2 billion dollars and develops chips tailor made for AI solutions, is a native Israeli company and is likely to receive further investment from Intel as strides in AI continue to be made.

Furthermore, investors seeking more value may be less risk averse going forward when it comes to Israeli AI startups. The smart money can see that in all likelihood, the next crop of Facebooks and Googles are already sitting on their own small piles of extremely valuable intellectual property, just waiting for the right investor to swoop in and take their cut. With the primary commodity in AI being educated, intelligent, and creative scientists and programmers who can actually design and research these things, Israel is very likely to entice further investment going forward given it is the third most educated country in the world.

Much like the early days of the internet, although much of the public is not aware of where the wind is blowing, the money continues to flow towards the inevitable future. Check back over the coming weeks for a blog post going into further detail on some innovative Israeli startups focused on AI and machine learning.