[New Wave] AI Services That Boost Profitability Are Rising

Artificial intelligence (AI) technology is rapidly evolving. In line with this, services that were previously hard to imagine are being launched one after another. Various AI services are being utilized in our daily lives, including AI speakers that listen to and understand human voices, mobile applications offering foreign language translation and interpretation functions, kiosks that issue tickets by recognizing faces without an ID card, and autonomous vehicles that perceive road conditions and obstacles.

As a result, service innovation using AI has become a major topic across all industries. However, these AI services are often led by global companies or large domestic IT firms. On the other hand, startups and mid-sized companies, which find it difficult to make large-scale investments in AI technology personnel and computing resources like large corporations, have also found it challenging to benefit from AI. But recently, with the advancement of cloud computing technology, the technical barriers have lowered, and startups are increasingly launching AI-based services without cost constraints or the burden of technological investment.

With the advent of the Fourth Industrial Revolution era, digital innovation has emerged as a core task across all industries. Companies in various sectors, including manufacturing, distribution, and consumer goods, are transitioning their existing IT environments to cloud environments and actively adopting AI technology to drive service innovation.

Looking at recent trends in cloud-based AI services, many companies are considering ways to generate more revenue from their existing businesses through AI technology. Previously, even if an idea was fresh, the cost-effectiveness of implementing and commercializing it was often low compared to experimental costs. Cloud significantly reduces these experimental costs and time. Using the latest AI technology called deep learning via the cloud can yield much better investment results than before.

One representative example is personalization and recommendation technology. Domino's Pizza uses a cloud-based AI service called Amazon Personalize to recommend customized pizzas by combining individual customers' past orders with external factors such as the day of the week and weather. This enables the provision of personalized services such as special sales events or offers through digital channels. Lotte Mart, for instance, conducted a pilot AI-based one-to-one product recommendation service for about 100,000 app users over two months starting in July last year. As a result, the customer response rate more than doubled compared to the existing recommendation model. Currently, they offer an M Coupon app to 300,000 users, allowing them to purchase products recommended by this service at discounted prices.

Services that easily detect fraudulent activities such as online payment fraud and fake account creation are also possible. Even those without experience in building fraud detection software can create fraud detection models with just a few clicks. Vacasa, the largest vacation rental service in North America, manages over 23,000 vacation homes in 17 countries and serves more than 2 million users annually. By using the Amazon Fraud Detector service, they have implemented a function that accurately detects fraudulent bookings for vacation home owners, reducing potential damages.

The development of new technologies follows a certain cycle. After the eras of personal computers, the internet, and smartphones, technologies like AI and blockchain are expected to follow. The key to this massive technological trend is how quickly an ecosystem that can generate profits by introducing it to the market can be built. The success or failure of AI technology in the future will also depend on productivity and profitability. While domestic companies spend time hiring expensive AI personnel and building infrastructure, global companies are busy devising ways to achieve cost-effective results by utilizing AI services. The rabbit of the 21st century does not rest until the tortoise catches up; rather, it runs even further ahead. We must also contemplate how to catch the two rabbits of productivity and profitability through AI.

Yoon Seok-chan, Senior Tech Evangelist, Amazon Web Services (AWS)