| While these are amazing performance numbers, I seriously wonder if all this expensive AI magic will be cost effective in the end. Their lead example is recommendation systems, but I can't say that I have received many good suggestions recently. Spotify and Deezer both suggest the chart hits, regardless of how often I dislike that kind of music. Amazon keeps recommending me tampons (I'm a guy) ever since I've had a coworking office with a female colleague in 2015. For all the data that they collect and all the AI that they pay for, these companies get very little revenue to show for it. |
There are 1 billion users, each of which spend x$ on the platform. The recommendation system does not need to get 100% accurate (it'd be very hard to get to something that 10% nonaccidental/nonfraud click through rate for example). It needs to be slightly accurate. The difference between 0.5% ctr and 0.6% CTR or conversion is probably 20% increase in revenue, and much more in profits (assuming fixed cost).