AI Trends Report

2023
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 Design for AI Event-Based Synthetic Data Edge AI
Insights

AI in Science AI Reasoning Digital Twin Combinatorial

and Engineering Optimization
AI TRENDS REPORT 2023 /// 2
Challenges that slowed the To overcome the challenges, enterprises
adoption of AI adopted different strategies
Data Readiness • Improve data management capabilities, including data governance and
data initiatives
• Lack of unified systems and unified data
• Create data catalogs
• Data quality issues
• Document data and information architecture
• Lack of the right data required for
• Solve data-related problems including data quality, privacy, and ethics
machine learning

ML Operations Capabilities • Increase availability of cloud platforms, tools, and capabilities

• Develop and grow machine learning operations (MLOps) tools,
• Lack of tools, technologies, and methodologies to platforms, and methodologies to enable model operationalizing and
operationalize models created by data scientists monitoring in production

Understanding of AI Role
and Its Business Value • Identify AI C-suite toolkits (for example, Empowering AI Leadership
from the World Economic Forum, 2022)
• Lack of understanding of AI use cases – how AI/ML • Document industry use cases
can be applied to solve specific business problems • Use frameworks and tools to define business value for AI investments
• Lack of understanding how to define the business
value of AI investments

AI TRENDS REPORT 2023 /// 3

Design for AI
Sustainable AI system design needs to consider several aspects: the business
application of the system, data, software and hardware, governance, privacy, and
security.

It is important to define from the beginning how AI will be used by and for the
application to clearly articulate business value, manage expectations, and set goals for
the implementation.

Design for AI will change how we store and manage data and how we approach the use
of data for development and operation of AI systems.

An AI system design approach should cover all stages of AI lifecycle, from design to
maintenance. It should also support and enable iterative development of an AI system.

To take advantage of different tools and technologies for AI system development,

deployment, and monitoring, the design of an AI system should consider software and
hardware needs and design for seamless and efficient integrations of all components
of the system and with other existing systems within the enterprise.

AI TRENDS REPORT 2023 /// 4

AI in Science and
Engineering
AI helps sequence genomes to identify variants in a person’s DNA that indicate
genetic disorders. It allows researchers to model and calculate complicated
physics processes, to forecast the genesis of the universe’s structure, and to
understand planet ecosystem to help advance the climate research. AI drives
advances in drug discovery and can assist with molecule synthesis and
molecular property identification.

AI finds application in all areas of science and engineering. The role of AI in

science will grow and allow scientists to innovate faster.

AI will further contribute to scientific understanding by assisting scientists in

deriving new insights, generating new ideas and connections, generalizing
scientific concepts, and transferring them between areas of scientific research.

Using synthetic data and combining physical and machine learning models and
other advances of AI/ML – such as graphs, use of unstructured data (language
models), and computer vision – will accelerate the use of AI in science and
engineering.
AI TRENDS REPORT 2023 /// 5
Event- and Scenario-
Driven AI
AI-driven signal-gathering systems analyze a continuous stream of data to
generate insights and predictions that enable strategic decision modeling and
scenario planning by providing understanding of how and what areas of business
might be impacted by certain events.

AI enables the scenario-based approach to drive insights through pattern

identification in addition to familiar pattern recognition, helping to understand how
events are related.

A system with anticipatory capabilities requires an event-driven architecture that

enables gathering and analyzing different types of data (text, video, images) across
multiple channels (social media, transactional systems, news feeds, etc.) for event-
driven and event-sequencing modeling.

ML simulation-based training of the model using advanced techniques under the

umbrella of Reinforcement Learning in conjunction with statistically robust
Bayesian probabilistic framework will aid in setting up future trends in AI.

AI TRENDS REPORT 2023 /// 6

AI Reasoning
Most of the applications of machine learning and AI today is about
predicting future behaviors based on historical data and past behaviors. We
can predict what product the customer would most likely buy or the price of
a house when it goes on sale.

Most of the current algorithms use the correlation between different

parameters to make a prediction, for example, the correlation between the
event and the outcome can look like “When X occurs, we can predict that Y
will occur.” This, however, does not translate into “Y occurred because of X.”

The development of a causal AI that uses causal inference to reason and

identify the root cause and the causal relationships between variables
without mistaking correlation and causation is still in its early stages but
rapidly evolving.

Some of the algorithms that the researchers are working with are casual
graph models and algorithms that are at the intersection of causal inference
with decision making and reinforcement learning (Causal Artificial
Intelligence Lab, 2022).

AI TRENDS REPORT 2023 /// 7

Synthetic Data
Synthetic data is artificially generated data that mimics the structure of real-life data. It should
also have the same mathematical and statistical properties as the real-world data that it is
created to replicate.

Synthetic data is used to train machine learning models when there is not enough real data or
the existing data does not meet specific needs. It allows users to remove contextual bias from
data sets containing personal data, prevent privacy concerns, and ensure compliance with
privacy laws and regulations.

Another application of synthetic data is solving data-sharing challenges.

Researchers learned that quite often synthetic data sets outperform real-world data. Recently, a
team of researchers at MIT built a synthetic data set of 150,000 video clips capturing human
actions and used that data set to train the model. The researchers found that “the synthetically
trained models performed even better than models trained on real data for videos that have
fewer background objects” (MIT News Office, 2022).

Today, synthetic data is used in language systems, in training self-driving cars, in improving
fraud detection, and in clinical research, just to name a few examples.

Synthetic data opens the doors for innovation across all industries and applications of AI by
enabling access to data for any scenario and technology and business needs.
AI TRENDS REPORT 2023 /// 8
Digital Twins
Digital twins (DT) are virtual replicas of physical objects, devices, people, places, processes, and
systems. In Manufacturing, almost every product and manufacturing process can have a
complete digital replica of itself thanks to IoT, streaming data, and cheap cloud storage.

All this data has allowed for complex simulations of, for example, how a piece of equipment will
perform over time to predict future failures before they happen, reducing costly maintenance and
extending equipment lifetime.

In addition to predictive maintenance, DT and AI technologies have enabled organizations to

design and digitally test complex equipment such as aircraft engines, trains, offshore oil
platforms, and wind turbines before physically manufacturing them. This helps to improve
product and process quality, manufacturing efficiency, and costs. DT technology also finds
applications in architecture, construction, energy, infrastructure industries, and even retail.

Digital twins combined with the metaverse provide a collaborative and interactive environment
with immersive experience and real-time physics capabilities (as an example, Siemens presented
an Immersive Digital Twin of a Plant at the Collision 2022 conference).

Future trends include enabling autonomous behavior of a DT. An advanced DT can replicate itself
as it moves into several devices, hence requiring the autonomous property. Such autonomous
behavior of the DT will in turn influence the growth and further advancement of AI.
AI TRENDS REPORT 2023 /// 9
Edge AI
A simple definition for edge AI: A combination of edge computing and artificial intelligence,
it enables the deployment of AI applications in devices of the physical world, in the field,
where the data is located, such as IoT devices, devices on the manufacturing floor,
healthcare devices, or a self-driving car.

Edge AI integrates AI into edge computing devices for quicker and improved data
processing and smart automation.

The main benefits of edge AI include:

• Real-time data processing capabilities to reduce latency and enable near real-time
analytics and insights.

• Reduced cost and bandwidth requirements as there is no need to transfer data to the
cloud for computing.

• Increased data security as the data is processed locally, on the device, reducing the risk
of loss of sensitive data.

• Improved automation by training machines to perform automated tasks.

Edge AI is already used in a variety of applications and use cases including computer
vision, geospatial intelligence, object detection, drones, and health monitoring devices.

AI TRENDS REPORT 2023 /// 10

Combinatorial
Optimization
“Combinatorial optimization is a subfield of mathematical optimization that consists of finding
an optimal object from a finite set of objects” (Wikipedia, retrieved December 2022).

Applications of combinatorial optimization include:

• Supply chain optimization
• Scheduling and logistics, for example, vehicle routing where the trucks are making stops for
pickup and deliveries
• Operations optimization

Classical combinatorial optimization (CO) techniques were widely used in operations research
and played a major role in earlier developments of AI.

The introduction of deep learning algorithms in recent years allowed researchers to combine
neural network and conventional optimization algorithms; for example, incorporating neural
combinatorial optimization algorithms in the conventional optimization framework. Researchers
confirmed that certain combinations of these frameworks and algorithms can provide significant
performance improvements.

The research in this space continues and we look forward to learning how machine learning and
AI (backtracking algorithms, reinforcement learning, deep learning, graph attention networks, and
others) will be used for solving challenging combinatorial and decision-making problems. AI TRENDS REPORT 2023 /// 11
References
“AI Can Power Scenario Planning for Real-Time Strategic Insights.” The Wall Street Journal, CFO “Empowering AI Leadership: AI C-Suite Toolkit.” World Economic Forum, 12 Jan. 2022.
Journal, content by Deloitte, 7 June 2021. Accessed 11 Dec. 2022. Accessed 11 Dec 2022.

Ali Fdal, Omar. “Synthetic Data: 4 Use Cases in Modern Enterprises.” DATAVERSITY, 5 May 2022. Falk, Dan. “How Artificial Intelligence Is Changing Science.” Quanta Magazine, 11 March 2019.
Accessed Accessed 11 Dec. 2022.
11 Dec. 2022.
Fritschle, Matthew J. “The Principles of Designing AI for Humans.” Aumcore, 17 Aug. 2018.
Andrews, Gerard. “What Is Synthetic Data?” NVIDIA, 8 June 2021. Accessed 11 Dec. 2022. Accessed 8 Dec. 2022.

Bareinboim, Elias. “Causal Reinforcement Learning.” Causal AI, 2020. Accessed 11 Dec. 2022. Garmendia, Andoni I., et al. Neural Combinatorial Optimization: a New Player in the Field.” IEEE,
arXiv:2205.01356v1, 3 May 2022. Accessed 11 Dec. 2022.
Bengio, Yoshua, Andrea Lodi, and Antoine Prouvost. “Machine learning for combinatorial
optimization: A methodological tour d’horizon.” European Journal of Operational Research, vol. Gülen, Kerem. “AI Is Revolutionizing Every Field and Science is no Exception.” Dataconomy
290, no. 2, 2021, pp. 405-421, https://doi.org/10.1016/j.ejor.2020.07.063. Accessed 11 Dec. Media GmbH, 9 Nov. 9, 2022. Accessed 11 Dec. 2022
2022.
Krenn, Mario, et al. “On scientific understanding with artificial intelligence.” Nature Reviews
Benjamins, Richard. “Four design principles for developing sustainable AI applications.” Physics, vol. 4, 11 Oct. 2022, pp. 761–769. https://doi.org/10.1038/s42254-022-00518-3.
Telefónica S.A., 10 Sept. 2018. Accessed on 11 Dec. 2022. Accessed 11 Dec. 2022.

Blades, Robin. “AI Generates Hypotheses Human Scientists Have Not Thought Of.” Scientific Laboratory for Information and Decision Systems. “The real promise of synthetic data.” MIT
American, 28 October 2021. Accessed 11 Dec. 2022. News, 16 Oct. 2020. Accessed 11 Dec. 2022.

“Combinatorial Optimization.” Wikipedia article, Accessed 11 Dec. 2022. Lecca, Paola. “Machine Learning for Causal Inference in Biological Networks: Perspectives of
This Challenge.” Frontiers, 22 Sept. 2021. Accessed 11 Dec. 2022.
Cronholm, Stefan, and Hannes Göbel. “Design Principles for Human-Centred Artificial
Intelligence.” University of Borås, Sweden, 11 Aug. 2022. Accessed on 11 Dec. 2022

Devaux, Elise. “Types of synthetic data and 4 real-life examples.” Statice, 29 May 2022.
Accessed 11 Dec. 2022.

Emmental, Russell. “A Guide to Causal AI.” ITBriefcase, 30 March 2022. Accessed 11 Dec. 2022.

AI TRENDS REPORT 2023 /// 12

References
Mirabella, Lucia. “Digital Twin x Metaverse: real and virtual made easy.” Siemens presentation at
Collision 2022 conference, Toronto, Ontario. Accessed 11 Dec. 2022.

Mitchum, Rob, and Louise Lerner. “How AI could change science.” University of Chicago News, 1 Oct.
2019. Accessed 11 Dec. 2022.

Okeke, Franklin. “The benefits of edge AI.” TechRepublic, 22 Sept. 2022, Accessed 11 Dec. 2022.

Perlmutter, Nathan. “Machine Learning and Combinatorial Optimization Problems.” Crater Labs, 31
July 31, 2019. Accessed 11 Dec. 2022.

Sampson, Ovetta. “Design Principles for a New AI World.” UX Magazine, 6 Jan. 2022. Accessed 11
Dec. 2022.

Sgaier, Sema K., Vincent Huang, and Grace Charles. “The Case for Causal AI.” Stanford Social
Innovation Review, Summer 2020. Accessed 11 Dec. 2022.

“Synthetic Data.” Wikipedia article, Accessed 11 Dec. 2022.

Take, Marius, et al. “Software Design Patterns for AI-Systems.” EMISA Workshop 2021, CEUR-WS.org,
Proceedings 30. Accessed 11 Dec. 2022.

Toews, Rob. “Synthetic Data Is About To Transform Artificial Intelligence.” Forbes, 12 June 2022.
Accessed
11 Dec. 2022.

Zewe, Adam. “In machine learning, synthetic data can offer real performance improvements.” MIT
News Office, 3 Nov. 2022. Accessed 11 Dec. 2022.

Zhang, Junzhe, and Elias Bareinboim. “Can Humans Be out of the Loop?” Technical Report,
Department of Computer Science, Columbia University, NY, June 2022. Accessed 11 Dec. 2022.

AI TRENDS REPORT 2023 /// 13

Contributors

Amir Feizpour David Glazer

Co-Founder & CEO VP of Analytics
Aggregate Intellect Inc. Kroll

Irina Sedenko Anu Ganesh

Advisory Director Technical Counselor
Info-Tech Info-Tech

Delina Ivanova Usman Lakhani

Associate Director, Data & Analytics DevOps
HelloFresh WeCloudData

AI TRENDS REPORT 2023 /// 14

2023 SECURITY PRIORITIES REPORT /// 15