From its most basic applications of tracking our fitness levels, to its wide-reaching potential across industries and urban planning, the growing partnership between AI and the IoT means that a smarter future could occur sooner than we think. This infographic by TSMC highlights the breakthrough technologies and trends making that shift possible, and how we’re continuing to push the boundaries.
AI + IoT = Superpowers of Innovation
IoT devices use the internet to communicate, collect, and exchange information about our online activities. Every day, they generate 1 billion GB of data. By 2025, there’s projected to be 42 billion IoT-connected devices globally. It’s only natural that as these device numbers grow, the swaths of data will too. That’s where AI steps in—lending its learning capabilities to the connectivity of the IoT. The IoT is empowered by three key emerging technologies:
Artificial Intelligence (AI) Programmable functions and systems that enable devices to learn, reason, and process information like humans. 5G Networks Fifth generation mobile networks with high-speed, near-zero lag for real time data processing. Big Data Enormous volumes of data processed from numerous internet-connected sources.
Together, these interconnected devices are transforming the way we interact with our devices at home and at work, creating the AIoT (“Artificial Intelligence of Things”) in the process.
The Major AIoT Segments
So where are AI and the IoT headed together? There are four major segments in which the AIoT is making an impact: wearables, smart home, smart city, and smart industry:
1. Wearables
Wearable devices such as smartwatches continuously monitor and track user preferences and habits. Not only has this led to impactful applications in the healthtech sector, it also works well for sports and fitness. According to leading tech research firm Gartner, the global wearable device market is estimated to see more than $87 billion in revenue by 2023.
2. Smart Home
Houses that respond to your every request are no longer restricted to science fiction. Smart homes are able to leverage appliances, lighting, electronic devices and more, learning a homeowner’s habits and developing automated “support.” This seamless access also brings about additional perks of improved energy efficiency. As a result, the smart home market could see a compound annual growth rate (CAGR) of 25% between 2020-2025, to reach $246 billion.
3. Smart City
As more and more people flock from rural to urban areas, cities are evolving into safer, more convenient places to live. Smart city innovations are keeping pace, with investments going towards improving public safety, transport, and energy efficiency. The practical applications of AI in traffic control are already becoming clear. In New Delhi, home to some of the world’s most traffic-congested roads, an Intelligent Transport Management System (ITMS) is in use to make ‘real time dynamic decisions on traffic flows’.
4. Smart Industry
Last but not least, industries from manufacturing to mining rely on digital transformation to become more efficient and reduce human error. From real-time data analytics to supply-chain sensors, smart devices help prevent costly errors in industry. In fact, Gartner also estimates that over 80% of enterprise IoT projects will incorporate AI by 2022.
The Untapped Potential of AI & IoT
AIoT innovation is only accelerating, and promises to lead us into a more connected future. The AIoT fusion is increasingly becoming more mainstream, as it continues to push the boundaries of data processing and intelligent learning for years to come. —Jared Newman, Technology Analyst on But fast forward to the end of last week, and SVB was shuttered by regulators after a panic-induced bank run. So, how exactly did this happen? We dig in below.
Road to a Bank Run
SVB and its customers generally thrived during the low interest rate era, but as rates rose, SVB found itself more exposed to risk than a typical bank. Even so, at the end of 2022, the bank’s balance sheet showed no cause for alarm.
As well, the bank was viewed positively in a number of places. Most Wall Street analyst ratings were overwhelmingly positive on the bank’s stock, and Forbes had just added the bank to its Financial All-Stars list. Outward signs of trouble emerged on Wednesday, March 8th, when SVB surprised investors with news that the bank needed to raise more than $2 billion to shore up its balance sheet. The reaction from prominent venture capitalists was not positive, with Coatue Management, Union Square Ventures, and Peter Thiel’s Founders Fund moving to limit exposure to the 40-year-old bank. The influence of these firms is believed to have added fuel to the fire, and a bank run ensued. Also influencing decision making was the fact that SVB had the highest percentage of uninsured domestic deposits of all big banks. These totaled nearly $152 billion, or about 97% of all deposits. By the end of the day, customers had tried to withdraw $42 billion in deposits.
What Triggered the SVB Collapse?
While the collapse of SVB took place over the course of 44 hours, its roots trace back to the early pandemic years. In 2021, U.S. venture capital-backed companies raised a record $330 billion—double the amount seen in 2020. At the time, interest rates were at rock-bottom levels to help buoy the economy. Matt Levine sums up the situation well: “When interest rates are low everywhere, a dollar in 20 years is about as good as a dollar today, so a startup whose business model is “we will lose money for a decade building artificial intelligence, and then rake in lots of money in the far future” sounds pretty good. When interest rates are higher, a dollar today is better than a dollar tomorrow, so investors want cash flows. When interest rates were low for a long time, and suddenly become high, all the money that was rushing to your customers is suddenly cut off.” Source: Pitchbook Why is this important? During this time, SVB received billions of dollars from these venture-backed clients. In one year alone, their deposits increased 100%. They took these funds and invested them in longer-term bonds. As a result, this created a dangerous trap as the company expected rates would remain low. During this time, SVB invested in bonds at the top of the market. As interest rates rose higher and bond prices declined, SVB started taking major losses on their long-term bond holdings.
Losses Fueling a Liquidity Crunch
When SVB reported its fourth quarter results in early 2023, Moody’s Investor Service, a credit rating agency took notice. In early March, it said that SVB was at high risk for a downgrade due to its significant unrealized losses. In response, SVB looked to sell $2 billion of its investments at a loss to help boost liquidity for its struggling balance sheet. Soon, more hedge funds and venture investors realized SVB could be on thin ice. Depositors withdrew funds in droves, spurring a liquidity squeeze and prompting California regulators and the FDIC to step in and shut down the bank.
What Happens Now?
While much of SVB’s activity was focused on the tech sector, the bank’s shocking collapse has rattled a financial sector that is already on edge.
The four biggest U.S. banks lost a combined $52 billion the day before the SVB collapse. On Friday, other banking stocks saw double-digit drops, including Signature Bank (-23%), First Republic (-15%), and Silvergate Capital (-11%).
Source: Morningstar Direct. *Represents March 9 data, trading halted on March 10.
When the dust settles, it’s hard to predict the ripple effects that will emerge from this dramatic event. For investors, the Secretary of the Treasury Janet Yellen announced confidence in the banking system remaining resilient, noting that regulators have the proper tools in response to the issue.
But others have seen trouble brewing as far back as 2020 (or earlier) when commercial banking assets were skyrocketing and banks were buying bonds when rates were low.
