It feels like a good week to talk about bubbles.
The temperature in Montreal was close to freezing on Oct. 18, yet the lineup at the Société québécoise du cannabis store on Ste-Catherine Street wrapped around the block for a second consecutive day.
Irrational exuberance? Or a symbol of all the wealth that suppliers will generate? There surely is some degree of excess when factory farms are likened to Amazon and Google just because they grow marijuana instead of tomatoes.
Cryptocurrencies and blockchains were going to change the world in 2017. Now, it looks like those innovations will be used simply to upgrade the plumbing of the existing financial system. Valuations are correcting as a result. Bet you a bitcoin that pot is on a similar path.
This brings us to another technology that definitely will change the world, and also has some bubbly characteristics.
If the fun Canadian business story of the moment is cannabis, the serious one is artificial intelligence (AI). When Stephen Poloz, the Bank of Canada governor, devoted a speech to creative destruction last month, he wasn’t thinking about pot. AI will reshape entire industries; tens of thousands of jobs will be taken over by computers, (hopefully) at least as many will be created in the process.
“In the future, AI is going to be as normal and as natural as the electricity in this room right now,” Carolina Bessega, chief scientific officer at Stradigi AI, told me in an interview at the company’s headquarters in Montreal earlier this month. “Nobody is going to talk about it because everyone is going to use it and have it.”
Bessega’s future is coming at us quickly.
Less than five years ago, Stradigi was just another developer of custom software. Then a retail chain asked the company to clean up a very messy inventory system. The job required sorting tens of thousands of items into a single database. It would have taken a human months to do it. So Bessega went to her boss, Basil Bouraropoulos, the chief executive, and said that she might be able to build an AI system that could do the work in a couple of hours. She was right; the gamble worked and the client was happy.
Bouraropoulos, an entrepreneur with a background in coding, refocused his company immediately. “We didn’t go into AI because it was a bubble, because in 2014 the bubble wasn’t there,” he said. “The bubble really started in 2016.”
In the future, AI is going to be as normal and as natural as the electricity in this room
Like pot, crypto, and blockchain, there’s some froth around AI too. Thousands of tickets for the annual Neural Information Processing Systems conference, which this year will be held in Montreal during the first week of December, apparently sold out in about 10 minutes. Something called the AI-Powered Supply Chains Supercluster, spanning the “Quebec-Windsor corridor,” won a share of the Trudeau government’s $950-million fund to create innovation hubs, enough to convince some of you that AI must be a loser if it needs Ottawa’s help. One of Bouraropoulos’s challenges is convincing clients that Stradigi is legitimate and not party of the hype.
“You see companies just adding ‘AI’ or ‘dot AI.’ I’ve seen it over and over,” he said. “We’ve even had questions from clients, `Are you really an AI company?’ My answer is always, `I’d love to have you visit our offices and see that we really have 30 PhD’s sitting in here’.”
I saw the 30 PhD’s; they exist. They soon will be joined by about a dozen more to help Stradigi keep up with a surge in demand, including a new partnership with Seattle-based Cray Inc., the publicly traded maker of supercomputers that generated (US) $392 million in revenue in 2017. After taking its time, Stradigi is stepping out from under the shadow of Mila, the Montreal-based AI lab founded by Yoshua Bengio, a pioneer of the field.
“They are doing a fantastic job and if you look at their plans for the future, I really see that Canada is going to be the leader in AI,” Bouraropoulos said. “I am very confident saying that, and I’m very confident that we are going to be a huge part of it as well.”
I’m inclined to believe him, because Bouraropoulos and Bessega were rare executives I’ve talked to this year who didn’t complain about a labour shortage. That’s a serious issue in a lot of industries, but not in AI apparently. If talented scientists are lining up to work for companies such as Stradigi, the industry should be able to grow quickly.
Only a couple of years ago, Canada’s best graduates were rushing to the United States. Now, that migration pattern has reversed. That might surprise those who think Canada’s personal tax rates are too high to compete in tech. The cost of living in places such as San Francisco and New York has become so expensive that Canadian cities such as Montreal and Toronto can compete easily, even if the taxes are higher, said Bouraropoulos.
It also helps that the U.S. has become hostile to immigrants. Canada becomes an easy second choice, especially if it means working in the orbit of world-class researchers such as Bengio.
“For people who are not from the United States, the situation in the United States is not easy,” said Bessega, a native of Venezuela. “That plays in our advantage.”
• Email: kcarmichael@postmedia.com | Twitter: CarmichaelKevin