At Rise of AI 2018 in Berlin, Charles-Edouard Bouée, CEO of Roland Berger, presents the results of four years of travelling the world to meet AI specialists, arguing that people should not fear AI but embrace it. He frames the argument through a history of technology waves: PC and software (IBM, Microsoft), telecom and GSM (won by Europe through regulation), smartphones and platforms (won by the US and China), and now a fourth, still open wave of AI. Using a story he calls the Kenny Ocean theorem, about a France Telecom futurist fired in 2000 for predicting a device that would become "the remote control of your life," he argues that winners of one wave typically lose the next because their business model does not transfer. He predicts the rise of portable, personal AI that will disrupt advertising-funded platforms such as Google, Facebook, Uber and Airbnb, and describes the resulting shift as a move from artificial intelligence to advanced human intelligence.
Key takeaways
- Bouée argues the winner of each ten-year technology wave typically loses the next wave because the underlying business economics change.
- He predicts personal, portable AI will replace search-based referencing and targeted advertising as the dominant business model.
- He estimates Google could lose 80-90% and Facebook 95-98% of revenue tied to advertising once portable AI removes the need for ads.
- He uses the Kenny Ocean theorem, about a futurist fired in 2000 for predicting a life-managing mobile device, to argue Europe repeatedly failed to act on foresight.
- He predicts portable AI will disintermediate platforms like Uber and Airbnb by letting devices negotiate and verify directly.
Detailed notes
Four years of research and the Kenny Ocean theorem
Bouée says the talk summarizes four years of work during which he travelled the world meeting AI specialists, several of whom are speaking at the same conference, and published a global study on AI companies as well as a book, first in French, with Chinese and American editions to follow. He illustrates his approach to forecasting with what he calls the Kenny Ocean theorem: around 2000, as a strategy consultant working on the France Telecom-Orange merger, he met a futurist named Kenny who showed him a device and predicted it would become "the remote control of your life." Kenny was fired for incompetence. In the same period, Nokia engineers invented SMS internally after noticing they preferred sending short messages to making calls, proposed it be patented, and were told nobody would want to communicate in 180 characters; they too were dismissed as incompetent. Bouée uses both stories to argue that Europe repeatedly saw the future clearly but failed to act on it out of arrogance.
Technology waves and why winners keep losing
Bouée traces four roughly ten-year waves of technology. The first wave, PC and software, was won by IBM and Microsoft starting in 1984. The second wave, telecom, was won by Europe thanks to the GSM standard, proposed by a junior European Commission staffer after Brussels failed to contain Microsoft; this made European telecom operators such as Orange, Deutsche Telekom, Vodafone and British Telecom the "masters of the universe" around 2000, before they were overtaken by smartphone platforms. The third wave, smartphones and platforms, was won by the US and China and produced today's dominant players: Google, Facebook and Alibaba. He notes that Android succeeded partly by historical accident, since Microsoft's paid-licensing model from the PC era did not transfer to mobile. His central pattern: the winner of one wave loses the next because the business economics differ between waves, and past dominant companies such as Cisco, once the world's most valuable company, decline without disappearing. The fourth wave, AI, is described as completely open, with no predetermined winner.
Portable, personal AI as the next disruption
Bouée predicts the next trillion-dollar company will not be a current advertising-funded tech giant, since those companies use AI and machine learning mainly to sell predictable, repeat advertising. He forecasts a shift to portable AI: AI becoming a commodity through open-source technology, personal and decentralized AI carried by each individual, systems that need less repeated training once they have learned a person's preferences, and interactions that happen directly between machines rather than through human-facing interfaces. He compares this personal AI to Jiminy Cricket from Pinocchio or Joy from Blade Runner 2049: a trusted, always-available assistant that protects personal data and preferences rather than exposing them. He calls the resulting combination of human and machine capability advanced human intelligence, arguing people will stop talking about AI and humans separately. He also criticizes current GDPR consent processes as meaningless fifty-page documents that change nothing.
Impact on advertising, platforms and enterprise systems
Bouée argues portable AI will remove the need for search-based referencing and targeted advertising: Google's top search results reflect payment rather than quality, he says, illustrating this with a search for the best parmesan. He estimates Google could lose roughly 80-90% of revenue tied to advertising and says Facebook is more exposed still, with 95-98% of revenue from ads; Amazon's advantage would shrink to logistics and price; Apple faces a harder shift because privacy-protecting AI runs counter to data-collecting business models, though it still sells hardware. He applies the same logic to platforms: with two portable AIs negotiating directly, a ride-hailing platform he calls "Yuber" would lose its role once maps are open source and payment is disintermediated, leaving only verification of driver history; Airbnb's largest department, which handles property damage recovery, could shrink because portable AI could verify every past guest. He extends the argument to enterprise resource planning systems, saying today's ERP tools exist because manual data entry is needed, whereas portable AI could pass information directly between colleagues' devices, moving business toward a more decentralized model that could also let legacy, disruption-resistant industries such as airlines and banks find new opportunities.
Consequences for work, consumers and society
Bouée predicts the next 10,000 startups will build AI business ideas the way earlier startups built internet business ideas around 2001. For employees, he expects augmentation: assistance with decisions and reduced low-value tasks, plus a shift from mass online courses toward individually tailored training. For consumers, he expects more power relative to providers through more information, more choice, time savings and self-explanatory profiles. He frames this as good news for politics too, since empowered citizens could reduce fake news and narrow the digital divide, provided people focus on skills that cannot be replicated. He closes by describing fear and hope as the two forces, rooted in the hypothalamus, that have driven humanity for 4,000 years: current AI already reduces car accidents, deaths and improves health, yet people still fear for their jobs, their children and their purpose. He lists several possible views of the future, including Elon Musk's claim that the odds of not living in a simulation are one in a billion, Vint Cerf's view that privacy was a historical accident, and his own view that the goal of the future is full unemployment so that everyone can play, and urges the audience to act on whichever future vision they hold, starting immediately.
Questions answered in this talk
What is the Kenny Ocean theorem?
According to Charles-Edouard Bouée at Rise of AI 2018, it is a story about a France Telecom futurist named Kenny who in the year 2000 showed him a device and called it "the remote control of your life," predicting mobile technology years before it arrived, and was fired for incompetence; Bouée uses it to argue that Europe has repeatedly failed to act on foresight.
Why does Charles-Edouard Bouée think Google and Facebook are vulnerable to AI?
At Rise of AI 2018, Bouée argues that personal, portable AI will remove the need for search-based referencing and targeted advertising, which he says could cost Google roughly 80-90% of ad-linked revenue and Facebook 95-98% of its revenue, since both currently depend heavily on advertising.
What does Charles-Edouard Bouée mean by portable AI?
At Rise of AI 2018, Bouée describes portable AI as a personal, decentralized assistant, compared to Jiminy Cricket or Joy from Blade Runner 2049, that protects a person's data and preferences, needs less repeated training over time, and interacts directly with other machines rather than through search engines or ads.