Monday, October 30, 2017

AI Algorithms Are Facebook's Most Valuable IP

I recently read a Wall Street Journal article about Facebook and Instagram (which is owns).

When Facebook wanted to create an AI (artificial intelligence) algorithm to select which items should be featured on users' News Feeds, it spent a lot of time and manpower creating it.

However, when its Instagram unit wanted an AI algorithm to create a curated photo feed for users, "three or four engineers got the job done in less than five weeks".

This is because they took Facebook's algorithm, tweaked it, and trained it with Instagram data.

Arguably, these algorithms are the most important IP (intellectual property) at Facebook because:

1. They control the user experience and customer value.  If the algorithms don't do a good job selecting appropriate content, users may find a competing platform that gives them what they are looking for.

2. They provide leveraged simplicity for Facebook engineers because, every time they want to create a new application, the algorithms build on their accumulated learnings and because quicker to implement.  We're talking exponential leverage.