Last week, Martin Abadi, a computer scientist and member of the Google Brain Team at Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL), along with David Andersen, an associate professor of computer science at Carnegie Mellon University, published a research paper that describes how artificial intelligence entities “can learn how to perform forms of encryption and decryption, and also how to apply these operations selectively in order to meet confidentiality goals.”
In simpler terms, GOOGL created three separate AI entities and instructed two of them to pass secret messages back and forth while the third attempted to intercept and decode them.
When the encryption was broken, subsequent messages were secured with even more advanced methods.
The truly amazing part of the experiment was that “the networks were not taught anything about encryption before the game began, meaning that the strategies they came up with were entirely original.” That also means Alphabet researchers may never know exactly what kind of encryption methods were being used, and they probably won’t be able to crack it, either.
Alphabet and the Competition in the AI Space
The GOOGL Brain Team isn’t the only AI research team competing to develop the next revolutionary advancement in machine learning and automation.
Microsoft Corporation (NASDAQ:MSFT), for example, recently created a brand new division to focus solely on AI, dedicating more than 5,000 employees to expand MSFT’s capabilities and commence in-depth research. International Business Machines Corp. (NYSE:IBM) has long been heralded as a pioneer in the AI space since the now-iconic Watson easily defeated two record-holding “Jeopardy!” contestants in 2011.
Additionally, a host of other massive tech-centric companies have demonstrated interest in furthering artificial intelligence capabilities, including Facebook Inc (NASDAQ:FB), Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), Nvidia Corporation (NASDAQ:NVDA) and Tesla Motors Inc (NASDAQ:TSLA).
Not all of these companies have the same goals in mind as Alphabet, but the fact that each of these industry giants has allocated significant financial and human resources to research and development of AI is a crystal clear indication that artificial intelligence will play a huge role in the future of all businesses.
Presently, the only company with an AI focus that’s on a similar plane to the advancements described by The Google Brain Team’s latest research publication — and that could possibly be in a position to challenge GOOGL for dominance — is IBM. Both Alphabet and IBM have, at this stage, adopted a more broad approach to AI development, focusing on improvements in communication, transmission and related logistics.
Competitors, however, each seem to have a rather specific niche to which an AI system or methodology would improve existing processes. TSLA, for example, is focusing the bulk of its AI research on improving its already impressive autopilot technology; FB has been looking to develop better facial recognition capabilities and improve its AI assistant; AMZN continues to work on expanding the functionality of its own popular AI virtual assistant, Alexa.
What Does This Mean for GOOGL Stock?
Other than a demonstration that’s more proof of concept than actual functionality, the AI encryption experiment by itself won’t do much to move the needle for GOOGL stock. However, the success of the AI secret messaging game has far-reaching implications, for both Alphabet and the world, and if Google continues to make new inroads into the AI space, GOOGL stock will definitely realize a benefit.
The power for Alphabet here is its access to near-limitless resources for researchers and developers, plus the fact that advancing technology in general is a solid cornerstone of the entire Google foundation. This is also a significant part of GOOGL stock’s long-lasting strength. Research at Google’s Machine Intelligence division states:
“Research at Google is at the forefront of innovation in Machine Intelligence, with active research exploring virtually all aspects of machine learning, including deep learning and more classical algorithms.”
It’s clear that Alphabet wants to remain a leader in the AI arena, a goal further evidenced by the company’s acquisition of DeepMind in 2014. According to the “About Us” page on its website, “DeepMind is the world leader in artificial intelligence research and its application for positive impact.”
And, similar to the research paper released last week by members of the Google Brain Team, DeepMind is focused on “developing programs that can learn to solve any complex problem without needing to be taught how.”
As Alphabet continues to expand its efforts to further the AI space, GOOGL stock will benefit in the long run as these advancements are eventually refined for real-world application. Today, the process may seem slow and the results minuscule, but soon it will snowball on itself.
As of this writing, Greg Gambone did not hold a position in any of the aforementioned securities.