[Introduction to Zhiyuan Xin] Element AI, a narwhal company founded by Turing Prize winner Yoshua Bengio, is facing the possibility of being sold at a low price. According to foreign media reports, the company signed an agreement last month to sell itself to Silicon Valley software company ServiceNow for $230 million, and its employees are also facing the possibility of being fired and stock options being cancelled. This company has been widely optimistic in the industry and has received huge financing from NVIDIA, Microsoft, Tencent and Intel.
Known as Canada’s’ Star of Tomorrow’, the AI company Element AI, which has raised hundreds of millions of dollars and is deeply supported by NVIDIA, Microsoft, Tencent and Intel, can’t support it anymore.
This company, located in Montreal, Canada, was once famous for its founder, ‘Yoshua Bengio, a Turing Prize winner and the godfather of deep learning.
However, as early as a few weeks ago, there was news that Element AI would be acquired by ServiceNow, an American cloud computing platform service provider.
At that time, the transaction was valued at about $500 million, which may become the largest acquisition in ServiceNow’s history.
However, according to foreign media, a document shows that Element AI signed a contract to sell itself to ServiceNow Inc for $230 million last month, while another document sent to shareholders shows that the company’s financial situation is indeed not optimistic. Not only are employees’ incomes not so good, but some people are facing dismissal and stock options are cancelled.
With Turing Prize winners and more than 100 doctors, Canada’s narwhal has a bright future.
In Canada, those very powerful start-ups with a valuation of more than C $1 billion also have a code name-‘(Narwhales’, and Element AI is a giant among the whales.
Although it has only been established for four years, Element AI has won the support of provincial and federal politicians (including Prime Minister Justin Trudeau) and many famous investors, and its prospects were once very optimistic.
This is mainly due to its contact with Dr. Bengio.
Yoshua Bengio, a Canadian computer scientist, is famous for his research in artificial neural networks and deep learning. He is also the winner of the 2018 Turing Award with Hinton and Lecun.
The’ Deep Learning’ published by the three people in Nature in 15 years has won more than 30,000 high citations.
After receiving his doctorate, Bengio became a postdoctoral researcher at MIT and AT&T Bell Laboratories.
Like Geoffrey Hinton and Yann LeCun, Bengio is considered by Cade Metz as one of the three people who made great contributions to the development of deep learning in the 1990s and early 21st century. According to MILA, among computer scientists whose H index is at least 100, Bengio is cited the most times every day.
Since 1993, Bengio has been leading MILA (Montreal Institute of Learning Algorithms), which is the largest deep learning academic community in the world, and has gathered a large number of top artificial intelligence researchers in the world.
Element AI is developed on the basis of MILA, and the products developed by Element AI are all based on the artificial intelligence technology related research of a large number of scholars in MILA for decades.
The company was announced in October 2016. In addition to Yoshua Bengio, other co-founders of the company include CEO Jean-Fran ois Gagne, Nicolas Chapados and Jean-Sébastien Cournoyer.
In its early days, it was regarded as one of the most promising technology companies in Canada, and soon established technology development centers in India, Chicago, Washington, San Diego and Silicon Valley.
At the 2020 NeurIPS conference, 10 of the 17 academic papers submitted by Element AI were accepted.
So, what is the business of Element AI?
In business, it is a bit like a consulting company in essence, which can help enterprises with limited AI experience to quickly deploy AI functions without establishing a dedicated internal team.
The company is also committed to developing AI algorithms that any organization can simply insert into its data set to generate insights.
Element AI’s products include knowledge clues, which is a search engine that can provide manufacturers’ technicians with relevant information about events with similar characteristics and speed up the diagnosis and repair of production line problems.
Another product task scheduling of Element AI provides the function of simplifying the daily operation of retail stores.
In order to enhance customers’ capabilities, Element AI uses its unique functions to help its customers process and clean up its large proprietary data sets. Apply GAN and similar models to enrich and increase data for training and analysis when necessary; With its tool set, you can quickly train, verify and improve the full-stack AI solution that can run in line with the actual process.
Publicized, but in deep trouble
Therefore, only nine months after its establishment, the company raised $102 million in venture capital, which is unheard of for a new Canadian company. It raised funds from international supporters such as Microsoft, Intel, Nvidia and Tencent Holdings.
A round of financing received 135 million yuan and opened five offices in North America, Europe and Asia, quickly becoming a pioneer in the field of AI. Two years later, Element AI received a loan of 5 million yuan from the federal government, and last year, in the B round of financing, it raised 200 million yuan from investors such as the Quebec provincial government and McKinsey.
In December 2018, Ottawa received a refundable contribution of $5 million from the federal government, saying that it would create about 900 new jobs and help the company hire experts and purchase computer equipment.
In addition, the federal government has also signed a donation agreement with Element AI, which will pay the company a’ conditional repayment amount’ of US$ 20 million within five years to assist a US$ 124 million project.
However, the money has not been paid to elemenai. But with the acquisition finalized, they will never pay the money.
Moreover, Element AI relies on cooperation with large companies, and the data processing cycle is long. Its original intention is to design a large and comprehensive general platform, and even high financing can hardly maintain its high operating costs.
The price dropped sharply, experts warned: another Canadian high-tech company acquired by the United States!
After obtaining huge financing, Element AI began a large-scale recruitment to establish the so-called’ super reputation’ of its founders, and recruited top AI talents in Canada and abroad. At one time, the number of its employees was expanded to 500.
However, rapid recruitment and attention-seeking run counter to its success in actually establishing software business.
After consulting initially, Element AI spent two years focusing on product development. The plan for 2019 is to bring several AI-based products to market, including network security products for financial institutions and a plan to help port operators predict the waiting time of truck drivers.
However, some customer partnerships reached an impasse in 2019 and 2020.
Deloitte said that by the end of November, the company’s annual income was only 10 million to 12 million US dollars.
Moreover, $230 million may not be the final amount. The notice pointed out that the purchase price of $230 million may be adjusted and spent, and the final price may be reduced to $195 million.
ServiceNow provides cloud-based workflow technology. As part of the transaction, it was agreed to pay $10 million to key employees and consultants including Mr. Gagne and Dr. Bengio. Case and the Quebec government will receive US$ 35.45 million and US$ 11.8 million respectively, which is roughly equivalent to the amount they invested in the first part of financing in 2019.
The founder and CEO of Element AI said in a statement,’ Element AI’s vision has always been to redefine the way enterprises use AI technology to help people work more intelligently.
After the acquisition of Loom Systems, Passage AI and Sweagle, Element AI is the fourth acquisition of AI by ServiceNow in 2020. ServiceNow said that when the transaction with Element will be completed in early 2021, Yoshua Bengio will serve as the company’s technical consultant.
The chief AI officer of ServiceNow said in a statement that with the powerful technology and world-class talents of Element AI, ServiceNow will enable employees and customers to focus on areas that only humans are good at, including creative thinking, interaction with customers and unpredictable work.
However, this acquisition may be a wake-up call for the Canadian AI community. Basli, former co-chief executive of Blackberry, pointed out that the smart glasses company North in Waterloo has been sold to Google this summer, which is another promising Canadian high-tech company falling into the hands of Americans, which is another warning to Canada.
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