AI and IoT: the ultimate combination of technological advances?

AI and IoT: the ultimate combination of technological advances?

IIf you keep up with advances in technology, you’ll know that the Internet of Things (IoT) is making our devices and their data increasingly interconnected – and predictions suggest there will be 75 billion such devices by now. 2025. Meanwhile, AI has applications that range from automating manual tasks to analyzing data. Yet an even more exciting discussion is how these technologies can combine to deliver more powerful solutions – sometimes called artificial intelligence of things (AIoT).

Let’s look at some of the uses of AIoT in manufacturing, smart cities, autonomous vehicles, and more, and some of the companies driving the innovation.

Understanding the Rise of AIoT

Ultimately, IoT is about gathering and sharing data. IoT devices collect data – often via sensors or software – and share it with a larger network or via the cloud. A simple example is a smartwatch that collects heart rate data from a wearer during exercise and sends it directly to a connected app.

The problem is that the raw data alone isn’t particularly useful. Would you rather know your heart rate throughout the day or get a glimpse of what those numbers mean for your fitness and health goals? For most people, it’s the second option – and that’s where AI comes in. AI can process and analyze data, making it capable of drawing conclusions, predictions and even decisions. This leads to much more powerful information and applications, and removes the need for humans to oversee certain processes.

But the potential of the marriage between AI and IoT becomes much more exciting than smartwatches. Let’s take a look at where some of the most promising opportunities lie and which companies should be on anyone’s radar looking to invest.

Smart cities

Smart cities use technology to be more efficient and sustainable. They do this in part by using sensors that collect data about different infrastructures and behaviors, and implementing changes based on that information. For example, cameras and sensors can show that there are congestion problems in an area of ​​the city and change traffic light patterns to help eliminate them. The IoT is responsible for collecting data, but AI is needed to understand it and make decisions without human intervention.

Another exciting innovation in this space is digital twins, which can create a digital simulation of a city to test different policies or models – for example, to examine how equipment or buildings can operate more sustainably. Several cities have already started using them, including Las Vegas and Mannheim.

Companies like Microsoft (MSFT) offer software that allows organizations to create digital twins. Microsoft Azure already has several partners in this space, including the city of Valencia, which used the software to model a lighting upgrade. General Electric (GE) is also a market leader.

Autonomous cars

Self-driving cars will also need AI and IoT to achieve peak performance. They must be able to analyze real-time data based on factors such as sudden stoppage of traffic or changing weather. This could also apply to other autonomous vehicles.

One of the most obvious leaders in the use of this technology is Tesla (TSLA), but automakers aren’t the only ones benefiting from the innovation. Companies that create chips play a vital role in ensuring the necessary level of performance. For example, semiconductor company Qualcomm (QCOM) includes the combination of AI and IoT in its roadmap for the future.


Like smart cities, manufacturing sites use sensors to collect data about information (such as inventory in a warehouse or the location of items in a supply chain). Therefore, they can also use AI to improve their efficiency and performance – it can offer recommendations based on shortages or issues it notices in supply chains and identify ways to modify processes.

For example, Siemens (SIE) has developed a service solution called MindSphere for industrial applications. This uses IoT and AI to help factories optimize their processes and develop better products.

productivity at work

IoT and AI technologies can also be used to improve people’s productivity and create more comfortable workplaces. Google’s Nest (GOOG) has created a smart thermostat, which uses a combination of AI and IoT to regulate temperatures for a specific individual based on work hours and their preferred climate.


Until now, robots created by humans were mostly quite rudimentary and couldn’t perform the kind of tasks that were easily given to them. However, as AI becomes more sophisticated and able to make sense of data from sensors and cameras, autonomous robots are a real possibility.

Autonomous robots could be used in industry to improve efficiency and make conditions safer for humans. Some estimates suggest that up to 40% of the workforce could be displaced within 15 years due to the potential of AIoT and similar innovations. Moreover, companies like Amazon are already preparing for this change by re-educating workers they think are obsolete.

Wherever this technology takes us, investors have a number of different opportunities to seize.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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