From hype to reality: Rakuten’s AI optimists weigh in

The world of generative AI is evolving at a remarkable pace. But what headlines are hype, and what has real potential to transform life as we know it?

This was the topic of conversation at the recent Rakuten Optimism 2023 business conference, where several experts joined Rakuten’s Chief Data Officer Ting Cai for a panel on The Future with AI: How Human and AI Collaboration will Transform the World.

Why is AI suddenly everywhere?

An AI expert with decades of experience, Cai kicked off his address by reporting his latest amusing discovery in a Seoul convenience store: a salad, boasting ingredients picked by ChatGPT. Cai sees this as symbolic of how the recent AI boom has brought the tech into the spotlight like never before.

“Not only big companies, but startups, academia and the open-source community are all jumping in to explore the possibilities with the latest advancements of AI technology,” he told the Optimism audience. “Almost every day, we hear news about AI. But what is hype? What is real? In order to tell the differences, let’s take a look at the fundamental technology changes.”

Chief Data Officer Ting Cai is leading the AI charge at Rakuten.
Chief Data Officer Ting Cai is leading the AI charge at Rakuten.

Cai listed several significant evolutions that have taken AI tech to the next level, including how AI models are no longer trained for specific tasks: “Today, that is no longer necessary. We have one gigantic model that is capable of doing so many things.”

How we train these models has also changed: “We used to train the AI models using unsupervised learning – you know the classical technique: We can mask out certain words and let AI guess what the blank is, how to fill the missing words. But today, we can combine that large-scale AI training with human instructions, so we can align the AI model with human values.”

The final thing Cai believes has jumpstarted the adoption of AI tools is the shift from a fixed taxonomy to natural language.

“It’s no longer just a fixed set of menus that only understands certain words. It’s capable of understanding the fundamental human language. Language is so fundamental to human beings,” Cai explained. “The powerful natural language interface truly enables everyone to communicate with AI models.”

Cai thinks that it’s this evolution that has truly delivered AI to the general public: “Now it has universal appeal. I have seen my grandparents and kids, elementary school students, using ChatGPT to help with their daily life.”

AI is for everyone

“How can we make sure that AI is accessible and affordable to small businesses?” Cai posed. “As you probably know, it takes millions of dollars just to train an AI model once. How can we make it more cost effective so that everyone, including small to medium-size businesses, can leverage the latest AI technology?”

There was excitement in the air about the potential value that Rakuten’s powerful big data and diverse lineup of services could bring its customers and partners in combination with AI.

“Rakuten is a unique company. I’m always amazed, still today, about the breadth of Rakuten’s portfolio of products and services across multiple industries. We have deep domain knowledge across multiple industries – fintech, financial services, commerce, marketing, mobile, you name it,” he said. “We have a vibrant ecosystem of more than 90,000 business partners, including 57,000 merchants. Just in Japan we have 100 million users with even more worldwide.”

Rakuten Insurance Planning Executive Officer Emiko Kosaki (left) and RIT Global Head Ewa Szymanska (center) took to the stage to outline the many areas Rakuten is already employing AI.
Rakuten Insurance Planning Executive Officer Emiko Kosaki (left) and RIT Global Head Ewa Szymanska (center) took to the stage to outline the many areas Rakuten is already employing AI.

Cai highlighted Rakuten’s overwhelming presence in Japan’s retail sector, where members have earned some 3.8 trillion loyalty points to date.

“Everywhere you go in Japan you can find points accepted in almost every store. It’s a fun game I personally love to play. We have 28 million Rakuten credit cards, and Rakuten Pay is at 6 million stores,” he declared. “We’re going to leverage our channels to make the technology more reachable.”

Utilizing this strong presence, Rakuten’s AI products can receive immediate and continuous feedback, fueling the development of secure, high-quality products, reviewed and validated by professionals.

“With that, we can build the data assets, continue to enhance the model and ensure safety and reliability to deliver unique value to our customers,” he said. “Security and privacy are super super important. This is not just to comply with regulations. This is super important for us to earn customer trust every day.”

Joining forces with OpenAI

Rakuten Optimism, the company’s largest interactive event, also served as the launchpad for a new collaboration between Rakuten and OpenAI, the company behind ChatGPT. Head of Strategic Accounts James Dyett joined Cai on the virtual stage to highlight the similarities between the two companies.

“We are so excited to be working with Rakuten because you all are going to be able to bring this technology to so many businesses across Japan and the world,” he told the panel. “One of the topics you and I have been talking a lot about over the past months is the impact that this can have for small business owners. A lot of people are spending time on tasks today that they maybe don’t enjoy, that don’t bring them the full satisfaction of their jobs. We can enable AI to take on a lot of that work so they can spend time on the things that they’re most excited about and are most important for their business.”

The panel was joined by James Dyett of OpenAI, the company behind ChatGPT and new partners of Rakuten.
The panel was joined by James Dyett of OpenAI, the company behind ChatGPT and new partners of Rakuten.

“I really feel we share the same common mission to bring AI technology to benefit all of humanity, to create value for society,” Cai agreed. “OpenAI is a very successful startup company, and to me, Rakuten is a collection of startups. We are full of innovation and entrepreneurial spirit.”

Dyett praised Rakuten’s engineering capabilities and the strides it has made in AI adoption so far: “You’ve launched some wonderful products with OpenAI already,” he told Cai. “What gets us really excited is we know that whatever we’re going to do together is going to have a huge impact because of the team that you have.”

Rakuten’s AI journey is already well underway

Cai was joined onstage by Rakuten Group executive officer Emiko Kosaki, who outlined a few of the areas Rakuten is already employing AI tools.

Global mobile messaging service Rakuten Viber has around 1.3 billion users worldwide. The service launched a new ChatGPT-powered chatbot inside the service in early 2023 in both English and Japanese, allowing users to ask questions, create images and more on the fly. The Japanese version has been particularly successful, with users sending some 8 million messages in just a few months.

Rakuten also launched Japan’s first public-facing* ChatGPT-powered “Investment AI Assistant” service on Rakuten Securities, which serves some 9 million accounts domestically. Rakuten Insurance Group has also implemented ChatGPT to help agents with customer interactions, with a view to implementing it for claims processing, operations and marketing.

The panel was also joined by Rakuten Institute of Technology Global Head Ewa Szymanska, who outlined a range of potential e-commerce products. One could empower smaller merchants with small marketing budgets with a simple tool that could automatically create effective marketing campaigns rivaling those of large companies. Another could allow fans of certain products to become brand ambassadors through the power of AI.

Ewa Szymanska's RIT is busy dreaming up ever more applications for AI tech at Rakuten and beyond.
Ewa Szymanska’s RIT is busy dreaming up ever more applications for AI tech at Rakuten and beyond.

“There are just so many things we can do with this new technology, and I’m personally extremely excited,” Szymanska said. “We look forward to working with merchants and customers to come up with ways to really integrate this new technology into our lives, into our work, into our business in a way that’s empowering, entertaining and also responsible.”

Wave three is on the horizon

“In wave one, we did a lot of experimentation, trying to figure out what works,” Cai explained. “In wave two, we’re focusing on Rakuten AI for business, because we believe that’s the prime application that is ready for real applications.”

The next wave is where Cai sees major disruption in the consumer space.

“In wave three, we’re also going to enable Rakuten AI services for consumers,” he declared. While Rakuten’s origins lie in e-commerce, its business scope has expanded into the medical field, telecommunications, fintech and more, and Cai sees boundless opportunity for AI implementation. “It’s all coming in 2024.”

Cai is optimistic about a future in which AI models can become trustworthy companions for almost every situation.

“Our mission is to augment human creativity with the power of AI. As you know, humans have emotion, creativity. AI is super good at synthesizing large information, creating content, creating drafts and automating tasks. It can have conversations. By bringing that together, we see unlimited potential.”

*Comparison of major online securities (top 5 companies by number of accounts: au Securities, SBI Securities. Matsui Securities, Monex, Rakuten Securities (in alphabetical order)) (July 19,2023, Rakuten Securities survey)

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