Artificial Intelligence: worth the hype?
This financial boost, along with bolder algorithms, Big Data and better infrastructure, is bringing founders and funders to the AI equation. Yet according to a recent report, 40 per cent of European firms classified as AI start-ups do not actually use artificial intelligence.
Is AI then just a fad – or is it worth the hype?
AI makes it possible for human capabilities to be undertaken by technology at scale. While rules-based programs have existed since the 1950s, AI nowadays usually relates to machine learning – providing systems with the ability to automatically learn from data and improve from experience without being explicitly programmed.
This can be applied to a wide variety of prediction and optimisation challenges, from predicting when patients will get sick to teaching self-driving cars to understand their surroundings.
To utilise this technology, start-up founders need access to talent around applied AI, access to large and proprietary data training sets, and domain knowledge to provide deep insights into the opportunities within an industry. Founders need to identify a sizeable target market and understand the problem they’re trying to solve.
I see no better target market for AI applications than real estate. Not only is it the world’s largest and most important asset class, but also one of the last industries to adopt technological change.
A great example is Israeli start-up Skyline AI, which takes the guesswork out of investment decisions by training its technology on the most comprehensive data set for US multi-family assets.
Mining data from over 130 sources and analysing 10,000-plus data points on each property for the last 50 years, its tech estimates asset value, predicts future performance and discovers investment opportunities.
AI can also optimise both property development time and cost. Nordic start-up Spacemaker AI is a development tool used to maximise the potential of building sites. Property professionals can use it to generate and assess billions of possible solutions to multi-building developments in hours – analysing designs for a range of different parameters such as sun exposure, noise pollution and apartment size.
The company has partnered with leading developers in Europe including Skanska, OBOS, AF Gruppen and Bouygues to help them reduce critical planning time while increasing sellable space by up to double digits.
Using Big Data and machine learning algorithms, Iberian start-up CASAFARI enables a higher level of efficiency and transparency in asset management. The software provides users with downloadable historical and descriptive data sets for all property cases – and is working to build the cleanest, most complete database in its geographies. Asset managers can use it to set data–driven rental prices and identify the best time to sell assets.
AI has almost unlimited potential across multiple industries and especially real estate. Not every solution requires it, but knowing how, when and where to effectively use the technology can be a key lever for start-ups and businesses alike.