A couple of years ago, a $999 iPhone app called “I Am Rich” made headlines for being the most expensive item in Apple’s iTunes App Store. (It was the ultimate symbol of conspicuous consumption, doing nothing but displaying a glowing red icon.) But compared to Siri—the “virtual personal assistant” app that can make restaurant reservations, book concert tickets, or look up weather forecasts based on spoken commands—I Am Rich was a steal.
The Siri app itself isn’t expensive; in fact, it’s free to iPhone, iPad, or iPod Touch users. The algorithms that make the app work, however, are the product of years of defense-sponsored research at Menlo Park, CA-based SRI International and other institutions that cost taxpayers at least $150 million. After SRI spun out Siri, Inc., to commercialize this work in 2008, Silicon Valley venture capital firms Menlo Ventures and Morgenthaler Ventures poured another $24 million into the technology. And finally, this April, Apple itself acquired the startup for a reported $150 million to $250 million.
How could a single mobile application have caused so much money to change hands?
The answer, of course, is that the fuss isn’t about the Siri app. It’s about the artificial-intelligence insights behind it: the chain of machine-learning, natural-language processing, and Web search algorithms that swing into action with every Siri query. When you can access these algorithms from a mobile device like the iPhone, and prime them with a bit of contextual awareness such as a GPS location reading or an understanding of the user’s preferences, you have a powerful personal tool that Norman Winarsky, SRI’s vice president of ventures, licensing, and strategic programs, likes to describe as a “do engine” rather than a search engine.
Right now, Siri can handle a limited range of jobs, such as checking a flight time, sending a tweet or an e-mail reminder, or finding out when a movie is showing—all things that can be achieved by connecting with existing Web services or tapping the structured information in open Web databases. But as the technology evolves, it could help to change consumers’ expectations of their mobile devices, gradually weaning them away from the keyword-driven thinking inculcated by traditional search engines and allowing them to interact with their gadgets in more conversational ways. So it’s not hard to understand why Apple (NASDAQ: [[ticker:AAPL]]), which is betting a large part of its future on the iPhone and the iPad, would pay to bring Siri in-house (and, not incidentally, to keep it away from Google).
Now that Siri’s technologists are behind the walls in Cupertino, they aren’t talking with the press. But in a recent conversation with Winarsky and William Mark, the head of SRI’s Information and Computing Sciences Division, I got a deep view of the project that gave birth to Siri—which is still underway and, as it turns out, will soon produce more progeny. The story of Siri’s emergence within SRI reveals quite a lot about the future of mobile technology, the undiminished role of defense spending in Silicon Valley’s success, the art of the spinoff, and the way researchers think inside this legendary Silicon Valley institution.
As a non-profit R&D center doing contract research for the government and other clients, SRI International has a fixation on real-world problems that reaches all the way back its founding as the Stanford Research Institute in 1946. The automated check reading technology developed at SRI in the 1950s, for example, is still in use by banks today. And the first computer mouse and other fundamental innovations in human-computer interfaces were loosed upon the world by
