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Cloud Computing: Apple’s reported $200 million acquisition of Xnor.ai is part of the bigger red-hot trend of edge computing

Cloud Computing:

  • The edge-computing industry is expected to be worth more than $3 billion in the next five years. 
  • In January, Apple acquired Xnor.ai for a reported $200 million, while Kneron, another edge-computing company, raised $73 million in funding from backers like Alibaba and Qualcomm.
  • Edge computing allows data to be processed “on device,” removing the dependency on cloud networks and limiting the risk of user-data hacking.
  • Alexei Andreev of Autotech Ventures, an early Xnor.ai backer, told Business Insider he was so “optimistic” about the industry’s future that his firm already invested in another edge startup.
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By 2025, the edge-computing industry is expected to be worth $3.24 billion. 

In January, Apple acquired Xnor.ai, an edge-artificial-intelligence startup, for about $200 million, GeekWire reported. A few weeks later, another edge-AI firm called Kneron raised $73 million in a fundraising round backed by the e-commerce giant Alibaba and the top-tier Silicon Valley investor Sequoia Capital.

So what’s all the hype about? 

Edge computing allows data to be stored and processed closer to home, as opposed to on the cloud. The increasing number of “internet-of-things” devices — everything from smartphones to smart diapers — means bandwidth requirements are being pushed to their limits. 

By transferring these processes to the “edge,” these devices can perform their primary computing functions without dependence on a WiFi or cloud network. This could be applied to complex filters on your favorite photo-editing app or facial-recognition capabilities in a smart camera. For example, the smart-camera company Wyze partnered with Xnor.ai so that its cameras could detect people without relying on the cloud.

In an age rife with fears over privacy and how big businesses make use of consumer data, limiting the use of cloud networks also means personal data doesn’t travel so far and is therefore less vulnerable to hacking. 

Cloud Computing: Albert Liu, CEO and founder of AI startup Kneron

Albert Liu, the CEO and founder of AI startup Kneron.

Kneron


Albert Liu, the founder and CEO of Kneron, told Business Insider the company hoped to “democratize” computing power. Among his firm’s biggest clients are Gree Electric, the largest manufacturer of air conditioners in the world, and Sogou, one of the best-known search engines in China. 

“Cloud-based AI definitely has its purpose,” Liu said. “But we want to disperse the power of inferencing among each individual device. You as a customer may not want your devices to be forced to access a cloud network every time you use it.” 

Xnor.ai, Apple’s most recent buy, was spun out of A12, a research institute set up by Microsoft cofounder Paul Allen in 2014.

The firm told Business Insider edge tech has “unique advantages” in the realm of privacy, “especially in a time when user-data concerns are more in the spotlight.” 

“[It’s] a clear signal that edge technology is a high-potential area of new investment for companies working on consumer electronics and other interactive technologies,” a Xnor.ai spokesman said. “A smartphone, tablet, or home-assistant device equipped with the tech Xnor.ai is building will provide a big leap forward for the markets in which Apple is the most competitive.”

He added: “We expect to see a big impact from edge-AI applications in the rapidly expanding world of IOT devices. We’ll see it in areas where privacy and the protection of user data are paramount, such as in medicine or law enforcement.” 

Autotech Ventures is a venture-capital firm that specializes in tech for vehicles. It invested in Xnor.ai long before it was bought by Apple.

Alexei Andreev, a managing director at Autotech Ventures, told Business Insider he felt “very optimistic” about the future of edge computing and that he just signed off on an investment in another edge startup. 

“I’m afraid I can’t tell you who it is yet,” he said. 

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