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Situational awareness: Alibaba's Jack Ma backed away from his promise to President Trump to create 1 million jobs in the U.S., blaming U.S.-China trade tensions.

1 big thing: The quiet AI revolution ...
Illustration: Lazaro Gamio/Axios

Last month, we reported on the silent run-up to the age of artificial intelligence, whose green shoots grow without fanfare only to flower a decade or two in the future.

But, but, but: As we reported yesterday, these quiet, behind-the-scenes developments are transforming modern work now.

Axios' Kaveh Waddell writes that we’re watching a slow revolution play out. “We don’t call them AI because they’re already here,” says Berkeley’s Ken Goldberg, a robotics expert who directs the university’s People and Robots Initiative.

  • If one dimension of the far-off AI future is autonomous vehicles, we’re living in its first stage, the age of smart cruise control: tools that use basic machine learning to take on just part of a job.
  • This is also the world of smart speakers and navigation apps like Waze that use human input — everyday technologies that ease specific tasks, but can’t really do anything on their own.

In business and consumer tech, this early wave of AI helpers is already everywhere.

  • Salesforce uses machine learning to identify promising leads based on the outcome of previous interactions, a spokesperson said. It can also predict the likelihood of losing a customer based on signals about how they use a company’s services.
  • Sprint uses Adobe’s AI platform to dig through troves of customer data and find potentially receptive groups of people to target with marketing, an Adobe spokesperson told Axios.
  • Even T.G.I. Friday’s has automated basic tasks ranging from staff scheduling to ingredient ordering and waste management, as we reported last week.
2. … will make us better thinkers

The Laboratory of Nuclear Studies, Cornell University, 1948. Photo: Bettmann/Getty

The ultimate goal of AI research is a system that rivals a human’s thinking power — but this is still far out of sight.

Instead, in the coming years, AI may provide an intelligence boost in a different way: by coordinating still-unsurpassed human brainpower and correcting some of the errors inherent how we think, Kaveh reports.

By definition, AI processes information very differently from humans and can combat group-think, Goldberg says.

  • One way to do this is by simply assembling better teams. Algorithms can create groups with complementary skills and qualities, each challenging their peers and filling in others' gaps — like an automated Tinder for work.
  • IBM is developing technology meant to prompt critical thinking in humans, in the form of what Goldberg calls an AI-powered devil’s advocate.
  • In a similar vein, bots will automate humans' better nature, reminding decision-makers about the context and ramifications of their choices, or of potentially false assumptions.

Go deeper:

3. Amazon's private label advantage

Amazon CEO Jeff Bezos. Photo: Alex Wong/Getty

Regulators on both sides of the Atlantic are examining whether Amazon's mountain of data gives it an inherent — and unfair — advantage over rivals. But they may be probing the wrong thing in the data.

Axios' Erica Pandey reports that James Thomson, a former Amazon executive who now consults for brands that sell on the platform, says the e-commerce giant's singular advantage is behavioral data allowing it to precisely target customers for its private label products.

This data tells Amazon who precisely is interested in what product. "They know exactly who has looked for batteries but has not purchased them," Thomson tells Axios. "That's the audience you want."

  • Driving the news: Margrethe Vestager, the EU's top antitrust cop, today launched a probe of whether Amazon is unfairly monopolizing data in order to outsell rivals.
  • Amazon declined to comment. But it might argue that third-party sellers — big-time wholesalers (about 0.5% of Amazon merchants) — have access to the same sales data as Amazon does.
  • But behavioral data — which it does not share — is deadlier, Thomson says. With it, Amazon can target a customer and beat national brands on price.
"They basically get to boil the ocean for their whole catalog and figure out exactly where the opportunities are."
James Thomson

The dominance of Amazon's private label on its platform will become a louder question if voice commerce — something the company is pursuing through Alexa — becomes the next big thing, says Gartner L2 analyst Cooper Smith.

  • Brands will have to train shoppers to ask for their exact products when barking an order at Alexa.
  • Otherwise, a generic request for "toilet paper" will mean Amazon gets to ship customers its own brand.

Go deeper: How Amazon steers shoppers to its own products. (NYT)

4. Worthy of your time

Illustration: Rebecca Zisser/Axios

Being Elon Musk (Ben Geman — Axios)

An interview with AI expert Kai-Fu Lee (Maria Streshinsky, Jessi HempelWired)

IKEA's vision: autonomous cars that are hotels, stores, and meeting rooms (Elizabeth WoykeMIT Tech Review) (photos)

Life after Jack Ma (Zen Soo and Li TaoSouth China Morning Post)

AI that dreams in tulips (Kelsey Campbell-DollaghanFast Company)

The traffic dangers of partial self-driving (Daniel Sperling, Scott Hardman — Axios Expert Voices)

5. 1 shopping thing: New tricks in Macy's

Erica tried VR furniture shopping and AR makeup browsing. Photo: Erica Pandey/Axios

At 2.5 million square feet, the Macy's in Manhattan's Herald Square is the largest store in the U.S. But an entire city block of real estate in one of the world's busiest spots is little more than a burden if the legacy retailer can't figure out how to attract customers in the age of e-commerce.

Visiting New York, Erica tested some of Macy's new virtual reality, augmented reality and machine vision features.

The big picture: Although this technology is at the cutting edge of what’s available in the U.S., it's old news in China. They are going to have to do better.

  • In the furniture department at Macy's, you can slip on Oculus headsets to picture a sofa or a dining table in your home. You can swap pieces in and out, and walk around to see how everything fits.
  • You can virtually try on hundreds of eyeliners, mascaras and lipsticks without getting your hands dirty.
  • A new feature called "Market" takes on Amazona section of the store reserved for smaller brands that have flourished online but want to get into brick-and-mortar stores.

But, but, but: All of these features and more have been commonplace in China for years.

  • JD.com has mastered unmanned store technology in China and is beginning to take the concept abroad.
  • Alibaba has long incorporated AR and VR into its brick-and-mortar outposts, including at the Starbucks Reserve Roastery in Shanghai.
  • One Macy's employee tells Erica: "They're ages ahead of us."