Samsung woos startups with AI fund, mirroring Amazon’s playbook

This picture shows Samsung Electronics CEO DJ Koh on stage at the company’s 2017 developer conference in San Francisco.

Samsung Electronics CEO DJ Koh on stage at the company’s 2017 developer conference in San Francisco. (Image credit: Samsung)

We’re in a gold rush-like moment where the biggest tech companies are staking their claims to capitalize on the soaring demand for voice assistants and the services they enable. To strike it rich, these firms must woo developers and entrepreneurs to build on their platforms.

It seems that with each passing day, Google and Amazon continue to make their respective voice-based assistants sound more human and helpful. Meanwhile, Apple recently opened Siri to third-party developers. Yet, there’s also Samsung, which made Bixby the centerpiece of its AI efforts a year ago and is now ready to put its money where its voice is.

Google Assistant already supports more than 1 million actions while Amazon has more than 25,000 skills available and just made it easier for non-coders to create and share their own skills. Amazon has already committed to investing at least $250 million since 2015 to improving Alexa adoption by developers. Apple opened up Siri in 2016 but with the introduction of Shortcuts, it could be the spark Apple needs to accelerate adoption. Months after its debut as part of the company’s Galaxy S8 smartphone, Samsung’s Bixby is now actively used by more than 10 million people.

Internet of voice things

Samsung has already been making investments in the voice space, acquiring Viv Labs in 2016 for $215 million, and introducing its digital assistant into its flagship Galaxy and Note smartphones, putting it in competition with iOS and Android devices. In 2017, Samsung doubled down on its strategy by extending Bixby to other devices, potentially giving consumers the ability to control their televisions, refrigerators, microwaves, laundry machines, and other appliances with their voice.

And now, Samsung aims to strengthen its ecosystem and make Bixby smarter. To do that, Samsung’s venture capital arm has created the Q fund to support startups tackling what Samsung thinks are AI’s most challenging problems. These are steps taken from Amazon’s playbook — launching an assistant (Alexa), opening it up to more devices, and now investing in the community (Alexa Fund).

Q Fund is not Samsung’s first opportunity as a corporate venture firm— it’s part of Samsung Next, the investment arm the company set up in 2017 with a $150 million purse focused on early-stage startups. Besides AI, the company is looking at such other areas as appliances, television, and virtual reality, or, as Samsung Next principal Christina Bechhold told me in 2017, anything where Samsung “can add significant value to their products and company.”

The fund’s establishment follows the opening of several European research centers which Samsung will use to explore “user-centric” AI. “Our research will help us to better understand human behavior while exploring areas like emotion recognition, and further expand the boundaries of user-centric communication to develop AI technologies that ultimately improve people’s lives,” Andrew Blake, the head of Samsung’s AI center in Cambridge, England, said in a statement.

Calling Alexa and Bixby

Much like any investment, backing AI startups offers Samsung some clairvoyance into what might be the next big thing, while also fostering its ecosystem. One can hardly avoid seeing a TV commercial these days from Amazon (Echo or Ring), Google (Home or Nest), or any of the countless IoT companies promoting a “smart” product—and AI is a part of that.

So while Amazon is top of mind for developers, startups, and entrepreneurs because of Amazon Web Services and its Alexa Fund, Samsung is working to play catch up. Its strategy? Unlike Amazon, Samsung isn’t offering a single device to play with, but a whole range of devices like TVs, dishwashers, laundry machines, phones, DVD players, computers, and even semiconductor parts.

And let’s not forget about Samsung’s reported Bixby speaker: AI startups could be influenced to build integrations with this device in order to boost traction and appeal when the speaker goes on sale.

Here’s what Bechhold told me when I asked her how Samsung Next viewed AI:

“This is something that’s going to touch every enterprise and consumer application going forward. As a first step, we acquired Viv Labs, and obviously we are launching experiences around the technology. We’re thinking about what are the core supplemental technologies and what are the ways AI can enhance experiences with devices. We’re trying to identify the first verticals for applications and the best companies in the verticals.”

Whether by design or not, Samsung is taking its time catching up to Amazon, Google, Microsoft, and Apple. The company needs to attract developers and entrepreneurs and then support them with more than just investment capital. And while the company’s latest steps towards building an ecosystem are taken from Amazon’s playbook, repeating them doesn’t guarantee success.