Who can predict how AI will impact the ranking of Estonia’s top tech companies?

Illar Kaasik

Managing Partner of Prudentia Tallinn

When a group of technology experts was asked at the end of 2023 as to what will be the biggest impact on the technology sector in 2024, most of them mentioned the rapid growth of artificial intelligence (AI) as a means to boost economic growth. I guess we have to wait and see whether these skyhigh expectations for AI will be followed by disappointment, as usual. The year 2024, however, has certainly been one of booming hopes and expectations for AI technologies. AI allows us to extract valuable information from a vast amount of data that is beyond the reach of human brain. This, in turn, should accelerate innovation and enable better decision-making.

For example, in healthcare AI helps to analyze images and identify diseases at an early stage, while the financial sector uses AI to detect fraud and make investment decisions. The application of AI technologies should lead to a rapid change in processes where one needs to make quick management decisions based on different data sets. A case in point is robotics which includes the development of self-driving technology.

Perhaps AI would also help us to make existing technologies that we use in our daily lives more intelligent. Google, Microsoft, Amazon, Meta and Baidu already invest heavily in AI-related research and development, creating dedicated AI laboratories and acquiring smaller AI companies to strengthen their competitive position. For example, Google Bard and Microsoft Copilot are used by many also in Estonia.

In our daily life, AI technology is already here in the form of chatbots and virtual assistants that respond to customer queries 24/7, improving customer service efficiency, availability and cost. The Google search engine provides more comprehensive answers to our questions, computer keyboards predict the next word and correct typos, and autonomous self-driving vehicles are smarter and use more optimal routes to the destination. Photos are designed by cameras and phones while e-commerce has precise data on the products that we use and need, etc. In such routine activities, IA helps us to save our time and money.

In the industry and manufacturing, AI helps to optimize logistics and supply chains, controls all aspects of robotic devices and automates their maintenance process. All this means smaller workforce needs as well. Does it mean that AI is taking over our jobs? Yes, but since AI also contributes to economic growth, it will be creating new jobs for more complex activities while making the so-called routine jobs obsolete.

But there are also major hurdles on the road – speaking on the topic of new technology, several of the world's leading tech visionaries (including Jaan Tallinn from Estonia) have warned about the risks involved in giving the technology control in several key areas. AI systems not only collect and analyze large amounts of personal data that can threaten people's privacy, but there is also worry that algorithms may contain biases that can distort the decision-making process. And what happens if there is a power outage and the whole software crashes?

When Bard was asked why it's not possible to stop the development of AI technologies in the world, it gave this answer: stopping the development of AI technology is very complex, both technically and politically. What we should be focusing on instead is how to guide the development of AI in a direction that maximizes its benefits to humanity and minimizes potential risks. In its survey PwC writes that while generative AI is still in its early stages of development, it is starting to significantly reshape corporate revenue. AI is able to create tremendous cost efficiency, enable new revenue streams, open new channels for customers, while enhancing the value proposition on the one hand and commercializing it on the other. One direct effect of this is that it will lead to a rapid change in the market value of companies at the forefront of the tech sector. And this should show also in the TopTech ranking of Estonia's most valuable technology companies already in the coming years.