The Secret Auction That Set Off the Race for AI Supremacy

By the time he stepped onto a bus in downtown Toronto for the first leg of a trip to Lake Tahoe in December 2012, Geoff Hinton hadn’t taken a seat for seven years. “I last sat down in 2005,” he often said, “and it was a mistake.”

He first injured his back as a teenager, while lifting a space heater for his mother. As he reached his late fifties, he couldn’t sit down without risking a slipped disk, and if it slipped the pain could put him in bed for weeks. So he stopped sitting down. He used a standing desk inside his office at the University of Toronto. When eating meals, he put a small foam pad on the floor and knelt at the table, poised like a monk at the altar.

He lay down when riding in cars, stretching across the back seat. When traveling longer distances, he took the train or went by ship. He couldn’t fly, at least not with the commercial airlines, because they made him sit during takeoff and landing. “It got to the point where I thought I might be crippled—that I wouldn’t be able to make it through the day—so I took it seriously,” he says. “If you let it completely control your life,” he adds dryly, “it doesn’t give you any problems.”

That fall—before lying down in the back of the bus from Toronto to New York, taking the train 2,700 miles to Truckee, California, at the crest of the Sierra Nevadas, and then stretching across the back seat of a taxi for the hour-long drive to South Lake Tahoe—Hinton had created a new company. It included only two other people, both young graduate students in his lab at the university. It made no products. It had no plans to make a product. And its website offered nothing but a name, DNN-research, which was even less inviting than the sparse page. The 64-year-​old Hinton—who seemed so at home in academia, with his tousled gray hair, wool sweaters, and two-steps-ahead‑of‑you sense of humor—wasn’t even sure he wanted to start a company until his two students talked him into it. But as he arrived in South Lake Tahoe, some of the biggest tech companies in the world were gearing up for a contest to acquire his newborn startup.

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He was headed for Harrah’s and Harveys, the two huge casinos at the foot of the mountains near the shore of the lake. Rising up over the Nevada pines, these twin slabs of glass, steel, and stone also serve as convention centers, offering hundreds of hotel rooms, dozens of meeting spaces, and a wide variety of (second-​rate) restaurants. That December, they hosted an annual gathering of computer scientists then called NIPS. Short for Neural Information Processing Systems—a name that looked deep into the future of computing—NIPS was a conference dedicated to artificial intelligence. A London-​born academic who had explored the frontiers of AI at universities in Britain, the United States, and Canada since the early 1970s, Hinton made the trip to NIPS nearly every year. But this time was different. To his mind, this year’s conference seemed like the ideal venue for a high-stakes auction.

Two months earlier, Hinton and his students had changed the way machines saw the world. They built what was called a neural network, a mathematical system modeled on the web of neurons in the brain, and it could identify common objects—like flowers, dogs, and cars—with an accuracy that had previously seemed impossible. As Hinton and his students showed, a neural network could learn this very human skill by analyzing vast amounts of data. He called this “deep learning,” and its potential was enormous. It promised to transform not just computer vision but everything from talking digital assistants to driverless cars to drug discovery.

The idea of a neural network dated back to the 1950s, but the early pioneers had never gotten it working as well as they’d hoped. By the new millennium, most researchers had given up on the idea, convinced it was a technological dead end and bewildered by the 50-​year-​old conceit that these mathematical systems somehow mimicked the human brain. When submitting research papers to academic journals, those who still explored the technology would often disguise it as something else, replacing the words “neural network” with language less likely to offend their fellow scientists.

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