Artificial intelligence (AI) is all the rage. It seems as if every big company is racing to figure out how to harness AI for their benefit. And for good reason: AI holds the promise to radically change how products are designed, manufactured, and sold.
But there's another related technology that could be even more important over the next couple of decades: intelligence augmentation (IA). It's quite possible that IA makes more money for investors putting money in the market today than AI does -- at least over the next decade or so. Here's what you need to know about this AI sibling.
What's the difference?
"Artificial intelligence" is the term used to refer to machines that can perform tasks normally requiring human intelligence. You'll sometimes also hear references to machine learning and deep learning, both of which apply to specific AI algorithms that enable computer systems to learn from data and make categorizations or predictions from other data.
Intelligence augmentation broadly refers to the use of information technology to enhance human intelligence. Today, though, IA has become to commonly be used to emphasize the potential for AI to assist humans in performing tasks rather than completely replace them.
You might think of IA as a kinder, gentler form of AI that is going to try to help you in your job, rather than take away your job. IA technologies can help increase the productivity of workers and take care of those boring, repetitive tasks that most people don't like to do.
Potential applications for IA
We don't have to look far to find existing uses of IA. Tesla's (NASDAQ:TSLA) autonomous-car technology doesn't completely replace a human driver. Instead, the technology uses AI to take over from the driver. If the AI system encounters a situation it can't handle effectively, it gives control of the car back to the person in the driver's seat. That's a textbook example of IA in action.
IBM (NYSE:IBM) embraces the concept of IA and refers to its efforts as "cognitive computing." The technology giant says it focuses "on building practical AI applications that assist people with well-defined tasks," as opposed to attempting to replicate human intelligence.
Probably the best example of IBM's IA efforts is Watson. A good example of how Watson augments human intelligence is in drug discovery. Last year, IBM worked with Barrow Neurological Institute to identify RNA-binding proteins (RBPs) that are linked to amyotrophic lateral sclerosis (ALS). Watson was used to analyze abstracts published before 2012 so that it could learn text patterns of known RBPs linked to ALS. It then used what it learned to evaluate a set of proteins that had been discovered to be related to ALS after 2012. Watson identified all three of them -- plus five new RBPs that had not been previously linked to ALS. This bodes well for use of IBM's IA technology in helping speed up drug discovery.
Another potential application for IA is in education. Online learning programs already use natural language processing -- the ability of a computer to understand human speech -- and machine learning to enable college instructors to teach more students while still addressing individual students' specific learning needs and styles.
These are just a few potential applications for IA. Nearly every industry could benefit from the technology.
According to CB Insights, over 550 start-ups with AI-focused products raised $5 billion in capital last year. I suspect that many of those products actually fit into the IA category. However, these start-ups don't yet present opportunities for average investors.
We have already identified two IA investing alternatives that you could buy: Tesla and IBM. Both companies are actively working on IA-related initiatives. They present dramatically different choices, though. Tesla stock is up big this year, while IBM's share price has fallen. Tesla is losing money but is growing sales; IBM is making a profit but sales are declining. Still, both stocks could be solid long-term winners in IA.
Google parent Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) is another company that focuses heavily on IA. There's a good chance you have already benefited from some of the company's IA initiatives in Google's maps, speech recognition, Gmail, and other apps. What's great about Alphabet is that, unlike Tesla, it's very profitable. And unlike IBM, sales are soaring.
One of the best practical users of IA right now is salesforce.com (NYSE:CRM). The company's Einstein Intelligence module can help organize leads based on how likely they are to close. Salesforce projects that AI could create 800,000 net new jobs by 2021. As we've seen, AI that creates jobs rather than replaces them fits squarely in the IA realm. While Salesforce stock is pricey, the company is expected to grow earnings by nearly 30% annually over the next five years.
Many other stocks typically associated with AI could also be IA plays. While most of the companies probably don't use the IA term, what they're doing certainly fits the IA definition.
Artificial intelligence could realistically replace a lot of humans in various industries over the coming decades. However, intelligence augmentation is already enhancing humans' ability to do their jobs. There could be a lot more IA-flavored AI products in the medium term -- and smart investors could make a lot of money from them.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keith Speights owns shares of Alphabet (A shares). The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Tesla. The Motley Fool recommends Salesforce.com. The Motley Fool has a disclosure policy.