Making "Her" Into Reality

Will you fall in love with a future operating system? These companies hope so.

Jan 28, 2014 at 9:30AM

Spike Jonze's latest movie, "Her," creates a future where technology is less visible, yet more ubiquitous than today. The main character uses an earpiece and handheld device to communicate with an operating system that follows a user across any platform, rarely utilizing the traditional desktop screens except when at work. And the main way of interacting with the operating system is through natural, conversational speech.

Even though it is science fiction, "Her" seems to be the end state for many current acquisitions and research from real-life tech companies. These companies are pursuing enhanced artificial intelligence and speech recognition. And the companies who don't jump on this future will be left in the digital dust.

Established artificial intelligence
The most well-known characters in AI today are IBM's (NYSE:IBM) Watson and Apple's (NASDAQ:AAPL) Siri.

Watson takes human's natural language and filters through data to find the most probable answers. It can take "unstructured data," that is, data computers typically cannot read because it isn't structured in tables, rows, or columns, and turn it into knowledge accessible not through complex queries but simple, vocal questions. It's now being used to help doctors find better cancer treatments and financial planners find better investments. IBM hopes Watson will bring in $1 billion in revenue by 2018.

Siri first debuted in Apple's iPhone 4S, allowing for simple functions like searching the web and initiating a call or writing a text message. The latest iOS version added more functionality for Siri, like sourcing information from Wikipedia and Twitter.

Apple's latest acquisitions point to further enhancements for Siri. In 2013, the company picked up intelligent calendar application Cue, which helps layout a user's day similar to Google (NASDAQ:GOOGL) Now. It also bought Topsy, which allowed customers to analyze and search social posts. And, a recently published patent points to expanding Siri from phones to docks.

Up and coming AI
Now, Google spent a rumored $400 million on an artificial intelligence company called DeepMind. DeepMind's website describes its software as useful in "simulations, e-commerce, and games," and the company has an impressive talent list with a former child chess prodigy and a Skype co-creator. This piles on to Google's other recent acquisitions of robot maker Boston Dynamics and smart home hardware maker Nest. If Google can succeed in integrating these seemingly disparate companies, it seems like having a conversation with your thermostat isn't too far off.

Losers of an AI future
While these companies are priming themselves to own any science fiction-like future, there are companies doomed to languish if they don't change their path.

This includes the lowly hardware maker. The future presented in "Her" doesn't contain several devices in multiple form factors as we have now, but one handheld device and one wearable earpiece that connects to a cloud-based operating system. IBM, a case study in staying relevant, keeps shedding its hardware operations with its latest $2.3 billion sale of its server business to Lenovo. As the main players build their artificially intelligent ecosystems, the hardware becomes less important as it's commoditized, and the main differentiation becomes software. Companies might also want more control over their hardware and the user experience, and produce their own. For example, Apple recently purchased a cutting-edge chip maker, Primesense. Microsoft stepped into producing its own hardware with its Surface tablets.

Just a movie?
On the other hand, "Her," like most future predictions, could be far off base. While it seems artificial intelligence will play a large role in future computing, we may combine such technology with even more screens. The point where computers become more intelligent than humans, called the singularity, may not come as quickly as predicted, and these future bets may be too far off to have any impact on company values today.

Just don't discount how many people will want to talk to their thermostats.

Human intelligence on the stock market
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Fool contributor Dan Newman owns shares of Apple. The Motley Fool recommends Apple, Google, and Twitter. The Motley Fool owns shares of Apple, Google, International Business Machines, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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