8 tech startup trends to watch in 2017

Artificial intelligence startups will be big next year, along with startups in cybersecurity, chatbots, VR and legalized recreational marijuana, according to experts.

By James A. Martin
Dec. 1, 2016


AI is expected to play a growing role in cybersecurity in 2017, as well. One reason why is that not enough people with cybersecurity skills exist to fill the available jobs. An estimated 1 million cybersecurity jobs are unfilled worldwide, according to Cisco. At the same time, the number of cybersecurity job openings is expected to increase to 6 million worldwide by 2019, Symantec reports

"The reality is that cybersecurity knowledge needs to be automated in some way," says John Shearer, CEO and cofounder of DarkLight, a cybersecurity analytics and automation provider. "Startups will emerge that recognize this huge market need for blending human expertise with AI. AI systems that can be taught by human experts, and human experts that can be taught by AI systems, is what the hottest startups will focus on."

Big data — and the sheer volume of data the world currently accumulates — is another driving force behind AI's rise. Every day, the world generates 2.5 quintillion bytes of data, with 90 percent of data in the world created in the last two years, according to IBM estimates. Enterprises need AI to learn from their customers' trends and patterns, build automation for greater efficiency, and help employees be more intelligent in their work, says Steve Goodman, a partner at VC firm Toba Capital.

2. Chatbot startups

Chatbots are automated services that interact with and offer information to humans, especially consumers, through a chat interface. And AI is one of the technologies that's helping to make chatbots mainstream.  "Thanks to AI, we've seen chatbots take center stage in 2016, and as we break into 2017, we expect this trend to spur even more innovation, specifically in the enterprise," says Ashu Garg, general partner at Foundation Capital, a Silicon Valley venture capital firm. 

Businesses will increasingly look to chatbots to help reduce spending on customer service, and insurance and financial services representatives, "fields that are ripe for disruption," Garg says. "Chatbots will be 'hot' simply because there is much to gain."

More than 85 percent of customer interactions will not include a human being by 2020, and chatbots will be the No. 1 consumer application of AI during the next five years, according to research from Gartner and TechEmergence, as reported by Business Insider.

In 2017, expect "a flurry of messaging platforms to open their platforms for chatbot integration," Garg says. "While Facebook is still the dominant messaging platform, WhatsApp, Kik, WeChat and other globally relevant messaging platforms will fuel chatbot innovation and healthy competition. As the technology gains traction and AI technologies continue to advance, we'll begin to see chatbots become increasingly integrated with companies' backend systems, changing the way people communicate with businesses."

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