Aug. 18, 2017 11:46 p.m. ET

Artificial Intelligence has become a hot topic based on the achievements of the biggest computing giants: Alphabet, GOOGL -0.1595412112196279% Alphabet Inc. Cl A U.S.: Nasdaq USD926.18 -1.48 -0.1595412112196279% /Date(1503090000160-0500)/ Volume (Delayed 15m) : 1299449 AFTER HOURS USD925.32 -0.86 -0.09285452071951457% Volume (Delayed 15m) : 59094 P/E Ratio 33.55445017263054 Market Cap 635639773709.218 Dividend Yield N/A Rev. per Employee 1373290 More quote details and news GOOGL in Your Value Your Change Short position Microsoft, MSFT 0.12430939226519337% Microsoft Corp. U.S.: Nasdaq USD72.49 0.09 0.12430939226519337% /Date(1503090000217-0500)/ Volume (Delayed 15m) : 18161839 AFTER HOURS USD72.41 -0.08 -0.11036004966202234% Volume (Delayed 15m) : 1127454 P/E Ratio 26.848148148148148 Market Cap 558335661300.138 Dividend Yield 2.1520209684094356% Rev. per Employee 720927 More quote details and news MSFT in Your Value Your Change Short position Facebook, FB 0.2995626385477203% Facebook Inc. Cl A U.S.: Nasdaq USD167.41 0.5 0.2995626385477203% /Date(1503090000280-0500)/ Volume (Delayed 15m) : 14595414 AFTER HOURS USD167.4 -0.01 -0.005973358819664297% Volume (Delayed 15m) : 667187 P/E Ratio 38.134396355353076 Market Cap 485879579466.552 Dividend Yield N/A Rev. per Employee 1945860 More quote details and news FB in Your Value Your Change Short position and others.

But technology keeps evolving and it is time for AI to take the next step in its evolution, becoming more accessible to businesses large and small.

That charge is being led by Veritone VERI -4.141291108404385% Veritone Inc. U.S.: Nasdaq USD7.87 -0.34 -4.141291108404385% /Date(1503090000338-0500)/ Volume (Delayed 15m) : 69971 AFTER HOURS USD7.87 % Volume (Delayed 15m) : 60 P/E Ratio N/A Market Cap 117451876.61087 Dividend Yield N/A Rev. per Employee 76554.1 More quote details and news VERI in Your Value Your Change Short position (ticker: VERI), which went public in May, and which claims to offer a platform that can be used to run AI tasks in a variety of areas, including understanding natural language and analyzing video, for clients from law firms to media companies.

Competing with Veritone is the 800-lb gorilla of cloud computing, Amazon.com AMZN -0.21862019425965834% Amazon.com Inc. U.S.: Nasdaq USD958.47 -2.1 -0.21862019425965834% /Date(1503090000209-0500)/ Volume (Delayed 15m) : 3210495 AFTER HOURS USD956.5 -1.97 -0.2055359061838138% Volume (Delayed 15m) : 103183 P/E Ratio 243.26649746192894 Market Cap 460429809206.396 Dividend Yield N/A Rev. per Employee 439731 More quote details and news AMZN in Your Value Your Change Short position (AMZN), whose Amazon Web Services, or AWS, already claims to be the largest outlet for AI. Amazon provides AI capability on top of the raft of other services it offers clients in the cloud.

Industry veterans smell the opportunity in this new wave of AI. Billionaire software pioneer Tom Siebel has a new venture that he says is doing some key work applying AI for clients in industries from energy to manufacturing to health care.

This vector of AI is unstoppable, Siebel tells Barrons.

WHEN IT FIRST EMERGED on the scene, AI was strictly the province of large companies such as Alphabets (GOOGL) Google, as this magazine reported in 2015 (Watch Out Intel, Here Comes Facebook, October 31, 2015). That is because AI has typically required both massive computing facilities and access to vast amounts of data, which only the largest companies could provide.

More and more, though, its becoming accessible to smaller companies. Amazons director of deep learning, Matt Wood, is an M.D. and Ph.D. who worked on the Human Genome Project and is now focused on the many customers doing various AI tasks on Amazons AWS, from furniture maker Herman Miller to Kelley Blue Book to the American Heart Association. In the last five years [AI] has gone from being a really academic preoccupation to addressing customer needs, he says.

Still, Veritone founder and CEO Chad Steelberg believes hes discerned a weakness in Amazon and Googles approach to AI that is an opportunity for his company.

ARTIFICIAL INTELLIGENCE TODAY means having a computer pore through reams of data looking for patterns. The machine on its own learns the rules of natural language grammar, say, or the difference between a picture of a cat on the internet versus that of a person or a car.

Steelberg, 46, says the problem is that no single algorithm used by a machine can be trained to sufficient accuracy. But train enough engines to work together and you can get high levels of accuracy, he says, noting that Veritone has spent time striking deals with researchers who each have an algorithm or a collection of algorithms, which he refers to as engines.

Google has one engine, he says, we have 30 of them just for natural language processing, and 77 overall if you count engines it has acquired to work on other types of machine-learning problems. His company is attempting to acquire more, across various domains of expertise.

Although no one Veritone client necessarily has massive amounts of data on its own, Steelberg expects to make up for that by pooling insights across his companys customer base.

For all the promise, Veritones shares are down a whopping 40% since their debut.

Steelberg, who started programming in the fourth grade, sold his last company, radio advertising outfit dMarc, to Google for $1.24 billion in 2006. Hes undaunted by the lackluster reception. The biggest challenge we have, he says, is that we are three years ahead of the average investor in terms of understanding the opportunity.

OLD HANDS IN SOFTWARE are just as enthusiastic. Siebel, 64, who sold his Siebel Systems to Oracle for nearly $6 billion in 2006, is solving another aspect of the AI problem: getting access to data.

His new company, C3 IoT, which is still private, is doing work for one of the largest electric utilities in the world, Italys Enel (ENEL.Italy), observing patterns in tens of millions of electric meters throughout Europe. C3 IoT hopes to help Enel discover how much its electricity is being used versus how much is being paid forto ferret out fraud.

There are numerous uses of machine learning across many industries. C3 is also working with Deere DE -5.379899983868365% Deere & Co. U.S.: NYSE USD117.31 -6.67 -5.379899983868365% /Date(1503090051752-0500)/ Volume (Delayed 15m) : 11342389 AFTER HOURS USD117.12 -0.19 -0.16196402693717502% Volume (Delayed 15m) : 22239 P/E Ratio 19.649916247906198 Market Cap 37523010381.8066 Dividend Yield 2.0458613928906315% Rev. per Employee 494044 More quote details and news DE in Your Value Your Change Short position (DE) to reduce inventory. The heavy-equipment maker, for instance, keeps some $4 billion worth of parts on hand for use in manufacturing. Using AI, its possible to get a better sense of how much is practically needed and reduce Deeres working capital costs.

The big picture to Siebel is that more sources of data are becoming available because sensors with network connections are being attached to every part of the electrical grid, and to other forms of infrastructure. These sensors are popularly known as the Internet of Things, a kind of second Internet that connects machines rather than people on their computers and smartphones. The Enel project is the largest such IoT project in the world, claims Siebel, connecting 42 million sensors.

In the future, he says, All problems will be problems of IoT. And the winners will be the companies that have enough sensors in place to generate the data needed to solve complex business problems.

TIERNAN RAY can be reached at: tiernan.ray@barrons.com, http://www.blogs.barrons.com/techtraderdaily or @barronstechblog

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Artificial Intelligence Gets a Lot Smarter - Barron's