Well, was that a venture partners They invest in what is called AI first companies. We're talking about artificial intelligence. Those are companies and entrepreneurs that are applying machine learning to the real world across the industries and functionality. So let's get into it with Ash Fontana, managing director of Zetta.
Before Zetta, he launched syndicates at angel List, his new book The AI First Company, How to Compete and Win with Artificial Intelligence, and Ash getting up early joining us on the phone from Sydney, Australia, where it's I think six thirty in the morning. Nice to have you here, Welcome to Bloomberg. Thank you so much for having on your side. Well, it's a pleasure. How are you and tell us about this past year, um, covid this book.
What's it been like? Mm hmm, Well, I'm well it was it was sort of a funny year, and that it was a good year to write a book, um to the inside and whatnot, um and finishing all those all those loose ends that they're just lying around in your house when you see you doing nothing else. So UM,
it was a good year in that regard. It was a very funny year to be in the field of artificial intelligence, because uh, you know, we've all heard this from a few different people, but the acceleration was incredible, and the imperative to automate as the sort of imperative to get a better understanding of what's going on in our world when we couldn't be out in the world UM really increased, and so that the right into adoption of these technologies really want through the root, meaning what like,
give us some examples of things that because I do think ash it's fair to say that for a lot of people, and I'm not making a judgment call, but when we think of AI, it's often guided by Hollywood interpretation of it, or we think about you know, controlling our minds UM. But it's already in our world and it's making decisions about things. M Yeah, indeed it is. And I think there's two aspects of this UM to bring it down to sort of really examples, you know.
One is what do you do when there aren't people around the aren't have people in close contact with each other in a place like a warehouse, Well, you have to use the machine. So firstly, understand what people would be doing that warehouse or the usual process let's observe it with some cameras and try to break it down with some sort of system that analyzes the feed from those cameras. Um. And then too, how do you move things around when there are people there to do that?
People can't be there to do that, it's not safe for them to do that, and to use robots, and robots are funny. That's sort of like a system that has lots of different bits of artificial intelligence in it. So you know, that's one sort of pretty tangible example. But you know what else happened last year was just
seven these systems were used. Whether they were energy systems like electricity good, whether they were economic systems like what happened in markets, they just started, um doing things you haven't seen them do before. And you know what artificial intelligence really is, I know people think of it a lot on the time. Is something that you know, is like a weird sort of mind. Um, It's really just
like a bunch of physical models strung together. And so when all these systems started going awry, and I really helped us understand what's going on by doing statistical analysis on the flow of power through degrees when no one's striving to work and everyone's staying at home. Why what
was happening there? How do we actually manage better how we move energy around the grid in that situation that we've mada sine before while and AI can sort of very quickly make a new model that helps you generate a prediction in that new world rather than you have to rely on your old models that were used to
generate predictions under normal uses usage patterns of electricity. UM. So it's really good at doing things like that, and the advantage to it is that it's constantly able to take in and make those decisions using real time data. So as the data can change, as we saw a year ago or a little bit more than a year ago, the data points changed dramatically. Nobody would have predicted it initially, right until, of course we started to see how significant
and how severe the pandemic was. But that's the advantage of AI. Yeah, that's exactly right. UM. You know a lot of these systems are trained in an environment that represents a real world environment. But every time they get a new observation, every time they take a new photo of what's on a shelf and supermarket or what's how things are moving around the warehouse. Will they make an observation of how power is flowing through the grid, you know, it's flowing to this part of the grid and not
that part of the grid. It learns and it updates the view of the world. Now we do that too as humans. Of course, we're always updating out view of the world. But you know, we're actually very hesitant to update out of view of the world because, um, we like being able to make decisions quickly based on instinct, and that requires having very solid models of the world. Whereas AIS don't sort of has that bias. They don't have that recency bias, so to speak, and they don't
have that need to be super intuitive about things. So they're updating the view of the world very very quickly,
and that can be really helpful. And in the situation so as what is an AI first company because you invest in them, Yeah, and and our first company is a company that genuinely puts AI artificial intelligence to start every conversation, in the conversations about who they're going to hire next, you go to hire people that you know can build these models, build these these machine learning models
that eventually start looking like AIS. You know what Are you going to put your money until you're gonna put your money into acquiring valuable data? What policy concerns do you have? Are you really going to play a role in the data own data privacy? Are first companies really put these conversations first so that they can genuinely build this stuff rather than try to sprinkle it on top later. So are these the company? So help me out here?
Are these the companies who are creating the AI infrastructure, the AI algorithms? Because it sounds like we are moving increasingly to a world where you know, every company, just like retail became kind of a digital e commerce company, had to adopt some kind of digital strategy. We saw that a lot in the pandemic or companies in general. Is it Are we moving towards a world where every company is going to have some type of AI strategy or AI first strategy? Yeah? I really think we are.
You know, the way you put it there, I think it's how I would put it um and that is all software will eventually become intelligent. Every bit of technology that we use will have a bit of a conicutve element to it. And in court we've seen so far as a couple of really nice companies get started, like UI Path and Palanteer and clubd Error and a couple of these companies that have gone public. Now you know they're really making the tools that other people build their eyes. Um,
they're not really a access companies themselves. They're not building the AI s. But you know, now that they're really well established and their products are mature, people can use them in retail, in manufacturing, in healthcare to build their own aies in those fields, combining their own experience of how things work. You know, how diseases progress, how consumers behave with the power of these models to get a
predictive system underway. But what to give me an idea because you do have some investments and I've been looking at your website earlier today, tell me what is an AI or what are some of the AI first companies that you have invested in, and just give us an idea of what they're doing, just so that our our audience and the ssters that are out there, because this does sound like something that will become more popular potentially
going forward. Yeah, for sure. I think A really good example is a company called Tractable, and what they do is they basically help people get back on their feet after being a disaster, you know, whether that's a weather disaster or having a car crash. And the way they do that they analyze images. So you have a little fender vendor on the way to work, you take a photo and they can analyze that photo a naked decision almost on the spot about whether your car is going
to be repaired or whether it's a write off. And that just gets the money in your account more quickly. It gets you back on the road more quickly, and it for the insurance company makes the cost of process
in that claim a lot lower. And you know how is that an AI first company, They had to for two years before they got any customers, really go and collect so much datas, so many different images, different ways in which cars go through crashes, and how different panels deform and whatnot, so that they could train their models to the point where they can develop a really accurate readoubt of the damage really quickly, just purely using computer vision and not using getting a loss adjuster or having
someone come out and have a look at the car. How much is that being used by the insurance industry, the auto industry at this point. Yeah, it's being used today by major insurers all around the world to make decisions every day. Um, and then you know, you can see how it could soon be used for other other purposes.
You know, if you're in a hail storm and your riot gets damaged, well, they can take a photo from space or from a drone and then analyze that photo and quickly give you an assessment of the damage and processes you're playing. You can see how it could be
used in all sorts of the types of situations. But today, dozens and dozens of the world's largest insurance company these working with them to process claims every single day, and it's in the hands of people in their apps that they've got on their phone and their their insurance company apps.
One thing I do want to ask you, because when we're taking images pictures up above, I mean, I'm thinking that there are some of our listeners or watchers on YouTube that are just saying, well, wait a minute, Okay, So now I start to get a little thinky about AI and then the privacy concerns. What are the boundaries
that need to be set with these AI first companies. Yeah, that's a great question, and you know, I'm all for thinking about the role of government here as being a really important one because in a sense, as as individuals our data, my data, your data in itself is not necessarily worth much, but as a collective data is worth a lot to these companies. And you know, we can work with government to make sure these companies respect our privacy where they need to and properly compensate equal for
their data, um when they when they use it. I think the EU is a real leading light here. Um. You know, recently they released some legislation where they just outright bands and applications I around facial recognition and whatnot, and I think there are categorically some really scary uses of it. And you know, we do have the power through the legislature the branded stuff, um, but you know, besides a couple of sort of very clear cases, it's
a more marginal consideration. And you know, I think having better standards for auditing, being more upfront about what data we're using, you know, with the cookie stuff that's hit the news today, I think that's a really good approach. But you know, looking to the EU and what they're doing,
I think an indication of what government do. Well look forward to having you back and maybe at a time where you don't have to get up so early, because I do think this is an interesting area, uh and certainly one that continues to development and really be a part of our world. More broadly, Ash, thank you so much. Ash Fontana, managing director of Zetta the his book The AI First Company, How to Compete and Win with Artificial Intelligence, joining us on the phone from Sydney, Australia,