John Whelan: The world is racing to embrace AI but the cost may be too high for Irish SME’s

The scale of investment required in the technology here is lacking

The big question for Irish AI start-ups or companies trying to introduce AI to their businesses is how quickly will these AI testing facilities be set up and what will be the access costs.

The US stock market leaves us in no doubt that we are in an AI and data revolution which is driving a customer revolution and a business revolution.

Sonantic typifies the trend, co-founded by Irishman John Flynn, and contacted by the creators of Top Gun, starring Tom Cruise, to build a custom AI voice for Val Kilmer, when the American actor was rendered speechless because of throat cancer. 

Sonantic recreated his voice for the film using their AI technology. The start-up, funded in the UK, was acquired by Spotify to create new experiences for its users.

The term artificial intelligence (AI) was first introduced in the 1950s, but it wasn’t until the launch of ChatGPT, which amassed over 100 million users within just two months in late 2022, that the wider public began to take notice. Today, an increasing number of businesses are turning to AI to manage their customers and business operations more efficiently.

To date, the big winners in the AI boom are the large social media and technology companies. The most obvious names, many of them with major operations in Ireland, are the large US tech names, notably Alphabet, Amazon, Microsoft, Meta, Intel, and Nvidia.

These companies seeking a competitive advantage in AI are investing heavily in the development of ultra-fast semiconductor chips to drive their growth.

Chip designer Nvidia has stolen the march, collaborating with chip fabricator Taiwan Semiconductor Manufacturing Company (TSMC), to dominate the market for these super-fast chips. Cloud infrastructure firms like Google, Microsoft, and Amazon with platform systems managing masses of data globally, need these super chips to enable them to more efficiently handle the data, and have snapped up most of the available ultra-fast chips most of them foreign-made.

The Biden administration worried about the absence of fabricating facilities on US ground, introduced the CHIPS and Science Act of 2022, which focused on growing a national US-based super semiconductor fabrication industry. Prior to the passage of the act, the US, although being the largest users, fabricated only 10% of the world’s supply of semiconductors. Intel for example designed their chips in the US, but then had them fabricated at their Leixlip plant in Ireland and in other countries, before despatching for sales to third countries.

In early March the US government awarded the Intel Corp. a package of grants and loans totalling 20 billion dollars, to build superfast semiconductors solely on US soil, with Intel advising that they will top the expenditure up to 100 billion.

In Europe, there is fear of being left behind in the AI race and EU policymakers have been looking at ways to ramp up and nurture innovation in AI within member states. Experts in the field have advised that to emulate the US and nurture innovation in AI at home, will require large amounts of computational stock powered with ultra-fast chips. This does not come cheap. OpenAI, the creator of ChatGPT, received 1 billion dollars from Microsoft to develop the famous Chatbot.

EU policymakers have decided on using the existing European High-Performance Computing Joint Undertaking to establish eight connected supercomputers across member states to support AI development at home, indicating that in early April they will formally announce the selected 8 institutes.

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However, the EU states that real-world AI testing will have to be established at the national level, and made accessible to SMEs and start-ups, to develop and train innovative AI. The big question for Irish AI start-ups or companies trying to introduce AI to their businesses is how quickly will these AI testing facilities be set up and what will be the access costs.

DC Cahalan, partner at the Cork office of Surevalleyventures focused on funding AI start-ups and spends his time between Cork and London reviewing AI investment opportunities, said there are a lot of SMEs wrapping an AI story around their business ventures, but said they are only investing in those creating their own unique AI software. 

The UK government recently announced plans to spend £900m (€1,052m) to build a supercomputer in support of UK-based AI research and is investing £2.5nb (€2.92bn) in quantum technologies. It will also spend £100m (€116.9m) in direct purchases of ultra-fast chips from Nvidia, AMD, and Intel.

Here in Ireland, although the government has announced a National Artificial Intelligence Strategy, with the ambition to be an international leader in AI, the scale of investment required is lacking.