Computers that can “think” like humans and solve complex problems may be the next frontier in a new era of artificial intelligence (AI). They may also represent a significant investment opportunity—both in the companies developing these solutions and the companies using them to transform their industries.
Cognitive computing builds on the existing ability of generative AI to answer questions and create text, audio and images based on user prompts. “Cognitive computing is still primitive, its potential to develop real-time insights from torrents of data currently meaningless to humans and machines alike will drive competition and economic value,” says Shawn Kim, head of Morgan Stanley Research’s Asia technology team.
Understanding the Innovation
Two major classes of cognitive computing systems are expected to emerge. The first can perform tasks independently without human intervention, such as the operation of autonomous vehicles, personal assistants and drones. The second augments human capabilities—for example, collaborating with a physician to diagnose diseases or even perform surgery.
This new evolutionary AI hinges largely on the emergence of “neuromorphic” computing, a chip-based technology that uses artificial neurons to mimic the functions and characteristics of the human brain and drive improvements in costs, efficiency and processing.
"It’s critically important that investors and companies begin to understand these developments, because they will shape business models for decades to come," says Kim. "Investing in such technology will be crucial to the long-term prospects of many firms."
The world’s largest tech companies have already made artificial intelligence central to their applications through deep learning methods that use neural networks to artificially replicate the structure and functionality of the brain. The systems are adept at pattern recognition, natural language processing, complex communication, learning and other—once exclusively human—activities. They can cover a broad range of applications, from cognitive consumer devices, such as smartphones, to robotics and infrastructure or utilities.
Cognitive computing would bring with it fundamental differences in how systems are built and how they interact with humans. Cognitive systems go beyond tabulating and calculating based on pre-configured rules and programs. Instead, they build knowledge and learn, understand natural language, and reason and interact more naturally with humans, potentially even "speaking" like humans.
"Humans no longer do the directing. The more data a cognitive system can access, the more accurate it becomes—just like a growing child," says Kim.