Tag Archives: Commoditization

The commoditization of AI algorithms

Butterfleye, where we’re investors, is the producer of the Nero 1, a wireless security camera which comes equipped with facial recognition technology.

Once you start using the Nero 1, it captures and prompts you to tag the faces it identifies. This lets the Nero 1 remain passive in the event that it sees a known face while alerting you to new faces who could represent potential intruders.

What’s interesting about the facial recognition feature is that Butterfleye developed it using the Amazon Rekognition API. In other words, Amazon built the general image recognition algorithm, and Butterfleye is now using it for the specific case of facial recognition by applying the algorithm to the facial data that it collects.

This is a great example of the commoditization of AI algorithms. As more people have access to these algorithms, the source of value increasingly shifts from the algorithm itself to the data to which the algorithm is applied.

Building an iPhone

Yesterday, I shared a post which gives an overview of what it’s like to work in an iPhone factory.

Today’s video shows how an individual can build an iPhone from scratch. It’s not exactly from scratch because parts like the logic board are sourced as an assembled product rather than as individual end components.

However, as the video shows, widely used hardware components are quick to commoditize. After this hardware commoditization, software remains the differentiator.

You can watch the 24 minute video below.