Facebook (FB) Boosts AI, Hires Google Chip Development Head

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Facebook 's FB strong belief that technologies like Artificial Intelligence (AI) will revolutionize the future and emerge as big business opportunities is helping the company take proactive steps in this direction.

The recent hiring of Shahriar Rabii, Alphabet GOOGL division Google's AI head of chip development reflects Facebook's growing focus in this area

Rabii was instrumental in helping the "lead team in charge of building chips for Google's devices, including the Pixel smartphone's custom Visual Core chip, which brought machine learning intelligence to the device's camera."

Building a Secure Platform With AI

Facebook is building its own team to develop in-house chips, per Bloomberg, following the footsteps of Apple AAPL , Amazon AMZN and Google.The company's efforts to develop in-house chips can help it better synchronize its hardware and software platforms.

Facebook is expected to use its in-house AI chips in the future models of Oculus Go VR headset and in its smart speakers that are anticipated to feature video chats as well.

Notably, Facebook has ramped up its efforts to secure its platform with AI technology following serious allegations related to fake news, data privacy and data misuse.

In order to bolster its AI portfolio, Facebook has taken the acquisition path. The acquisition of AI start-up, Bloomsbury, which specializes in natural language processing (NLP), is expected to help it counter the fake news menace.

Facebook, Inc. Free Cash Flow (TTM)

Facebook, Inc. Free Cash Flow (TTM) | Facebook, Inc. Quote

Additionally, talks of Facebook using blockchain technology for securing data handling process are also doing the rounds. The technology's decentralized, transparent and incorruptible characteristics are likely to aid in preventing data infringement.

To fulfill its mission, which is to "give people the power to build community and bring the world closer together", Facebbok expanded its AI efforts to identify users with suicidal motives. It sought to recognize patterns in their posts and live videos. It also collaborated with suicide prevention groups to provide users with suitable help.

With roughly 40% of the world's population using a Facebook-owned platform, the company continues to invest heavily on developing AI technology, estimated to be worth close to $46 billion by 2020 per IDC, in its efforts to handle data breach and boost user confidence.

AI to Drive Top Line

Facebook has also appointed employees to keep a close watch on online campaigns to combat data leak threats in addition to its investments in AI.

But with its heavy reliance on AI technologies, a better alternative to its human counterparts, the company can identify and respond to data leaks and privacy issues quickly and efficiently. This will help the company in providing a safe social media platform to its users in a cost-efficient way. Going forward, AI can detect threats and frauds rapidly and resourcefully than its human counterparts, thereby removing the company's dependence on them.

Additionally, with the use of AI, customers' (large user base of 2.2 billion at the end of last reported quarter) preferences can be decoded, enabling advertisers to promote targeted advertisements. Facebook, which generated around 98% of its total revenue from advertising in 2017, is expected to benefit from its investments in AI going forward.

Moreover, as Facebook is diversifying its portfolio base, with its entry to services live streaming and gaming, it can well adopt its AI technologies to identify customer patterns and deliver customized services thereby enhancing customer satisfaction and driving top-line growth.

Currently, Facebook has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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