to learn how AI is affecting business from leaders at Facebook, Clarifai, and IBM Watson. I'll be in New York on 4/5 for the Future Labs AI Summit to learn how AI is affecting business from leaders at Facebook, Clarifai, and IBM Watson. If you can make it, I'd love to meet you there! -Sam

For the past decade, New York has worked to overtake the Bay Area as the US’s #1 startup hub.

New York startups have doubled their relative share of dollar volume invested into new tech companies nationwide since 2006 (source: Mattermark), and are now potentially staring down the opportunity to carve out a larger slice of that pie. Recent breakthroughs in Artificial Intelligence will enable tasks that were once thought impossible for a computer to accomplish. In the way that mobile made Uber (via GPS chips) and Snapchat (via front-facing cameras) possible, AI is believed to be the technology that will set off the next wave of massively successful start ups.

Just as electricity transformed almost everything 100 years ago, today I actually have a hard time thinking of an industry that I don’t think AI will transform in the next several years. — Andrew Ng, Founder of Google Brain

The most interesting thing to see over the next few years is how New York’s startup community will weather the hype surrounding artificial intelligence. Over time, the only AI startups that will attract capital from investors and top talent from companies and universities, will be those that achieve revenue traction. John Frankel of ff Venture Capital and Steven Kuyan of Future Labs believe New York’s startup community has the characteristics necessary to survive the hype:

A laser focus on problems that exist in the enterprise A dense group of Fortune 500 companies that will pay for AI-enabled products Top universities exposing their students to early stage startups

“What else are you working on besides Machine Learnings?” Usejournal.com

New York’s AI-First Startups

“NYC has always been enterprise focused and that’s where the opportunities lie for AI startups. In the last decade, enterprise talent has been fueling the startup ecosystem, talent that knows the industry gaps and how to get months long deals cycles closed. This revenue-driven approach, deep understanding of industry and focus on enterprise will allow NYC AI companies to rise above the hype.” — Steve Kuyan

As the hype and funding around AI ramps up, you can expect startups to focus on their technology, potentially at the expense of solving a customer pain. Steve considers an AI-first startup to be one that solves a customer pain with AI at the core of what they do — not as an afterthought that is integrated into the product later on. At some point, the novelty of AI will wear off, and New York will still be a “show me your revenue” startup community. x.ai and Clarifai are good role models for New York’s newly-founded AI-first companies.

Both x.ai and Clarifai have built deeply technical teams that excel, respectively, in natural language processing and visual recognition. Clarifai uses that expertise to help companies algorithmically identify objects in photo (think NSFW image detection for media companies), and their recent $30m Series B points to the fact that they’re solving a major problem. x.ai uses natural language processing to power a bot that schedules meetings for you, and closed a $23m Series B nearly a year ago. Only time will tell if the AI-first startups demoing at the Future Labs AI Summit will experience similar success, but they seem to be off to a good start:

AlphaVertex: develops cognitive systems that provide advanced analytical capabilities to the financial community, like finding hidden connections in data, predicting outcomes and identifying trends in markets. Their models recently went live on develops cognitive systems that provide advanced analytical capabilities to the financial community, like finding hidden connections in data, predicting outcomes and identifying trends in markets. Their models recently went live on Quantopian Behold.ai: is an artificially intelligent medical imaging record platform that helps healthcare providers parse and process billings, claims, and medical images. is an artificially intelligent medical imaging record platform that helps healthcare providers parse and process billings, claims, and medical images. Cambrian Intelligence: is a robotics operating system used to train industrial-grade robots to conduct difficult physical tasks (like assembling cars, removing toxic waste). They’re currently piloting with a major automaker. is a robotics operating system used to train industrial-grade robots to conduct difficult physical tasks (like assembling cars, removing toxic waste). They’re currently piloting with a major automaker. HelloVera: is developing a natural language processing engine that is used to power AI customer service agents across various channels such as email, chat, and social. It’s founders helped build IBM Watson. They’re currently piloting with two major consumer brands. is developing a natural language processing engine that is used to power AI customer service agents across various channels such as email, chat, and social. It’s founders helped build IBM Watson. They’re currently piloting with two major consumer brands. Klustera: uses anonymous smartphone WiFi signals to transform human consumer behavior within physical spaces (i.e. airports, malls, restaurants, concerts) into data and insights. They’re currently piloting with a major food chain, and have several clients in Mexico, including Walmart. uses anonymous smartphone WiFi signals to transform human consumer behavior within physical spaces (i.e. airports, malls, restaurants, concerts) into data and insights. They’re currently piloting with a major food chain, and have several clients in Mexico, including Walmart.

New York’s Fortune 500 Companies

“A lot of opportunity exists in the enterprise, post-consumer side of AI. New York has deep resources within media, finance, retail real estate. The large businesses that have been built without AI get that an AI-related solution could really disrupt what they’re doing. Companies that fit into that category will want to beef up their AI capabilities.” — John Frankel

Many tech investors believe that the massive amounts of data acquired by large tech companies gives them an unfair advantage over startups in creating AI-first consumer applications. If that’s the case, startups will need to turn to the enterprise to generate the revenue they need to survive. John’s basically saying that New York’s landscape is perfect for AI-first startups since it’s home to the most Fortune 500 companies of any state in the US, and they’ll will be willing to pay for AI-enabled solutions to protect themselves against disruption that AI-enabled services could cause.

New York Universities

“[New York has] 600,000 students and 81 colleges. That’s the highest number of any city in the country, and gives New York an advantage over the next decade. NYU’s Future Labs effort to work with startups brings academics closer to [small] business.” — John Frankel

John’s thought here is that New York’s AI startup community will benefit from the bleeding edge research that is happening within the walls of university’s lab. As New York’s colleges and startups work together, you can expect to see theoretical AI techniques being commercialized much faster. The benefits of this are many-fold. As an example, students exposed to startups while studying AI at NYU, Columbia, or CUNY could be more likely to spin out their own companies than to work at the highest paying bank. As the caliber of AI talent founding (and joining) startups continues to climb, so too will the quality of companies.

And that, is the way New York’s AI community will survive the hype.

If you’re interested in learning more from the AI leaders at Facebook & IBM Watson how AI will impact our society, I hope I get to meet you at the Future Labs AI Summit.