Innodata Inc. (NASDAQ:INOD): Artificial Intelligence Software from Seven Years of R&D Wins Major Contracts

October 2, 2023
Artificial intelligence software development company Innodata (NASDAQ:INOD) CEO and President Jack Abuhoff

Jack Abuhoff, CEO and President, Innodata (NASDAQ:INOD)

Innodata Inc. (NASDAQ:INOD) has been developing artificial intelligence software for 7 years and this R&D investment has been winning major contracts.

Jack S. Abuhoff has served as President and Chief Executive Officer of Innodata Inc. since September 15, 1997, and a director of the company since its founding in 1988.

Mr. Abuhoff served as Chairman of the company’s board of directors from May 2001 to June 2020.

Since joining the company, Mr. Abuhoff has focused Innodata on helping information and media companies create and maintain leading information products.

From 1995 to 1997 he was Chief Operating Officer of Charles River Corporation, an international systems integration and outsourcing firm. From 1992 to 1994,

Mr. Abuhoff was employed by Chadbourne & Parke, LLP in connection with its joint venture with Goldman Sachs to develop capital projects in China.

He practiced international corporate law at White & Case LLP from 1986 to 1992. Mr. Abuhoff holds a B.A degree in English from Columbia College (1983) and a J.D. degree from Harvard Law School (1986).

The Innodata Inc. (NASDAQ:INOD) CEO explains the target markets for his artificial intelligence software.

“The way that we use computers today for mundane tasks — booking airline fares, renting an apartment, shopping online, getting tech support — it’s all going to change.

The new interface is going to be conversational.

And the work that people do — that is going to fundamentally change as well.

Just as an example, we are working with one of the largest banks in the world right now, looking at the way they perform certain work and we are building new generative AI-enabled platforms that will help you do this work in a fundamentally different way.

They recently told us that what used to take them three hours is now taking them 45 minutes using our AI-enabled platform.

And we are just at phase one in what will likely be three phases of this project.

I think, eventually, where that gets them is the thing that used to take three hours will take them about ten minutes…

We’re developing a platform to help banks comply with global regulation.

So if you’re a regulated entity, one of the problems you have is knowing when the expectations of the regulator have changed.

They issue new guidance.

They issue new directives.

They issue new law.

You need to know what’s changed and then you have to know how it impacts your business.

The platform that we are developing helps do all of that.

It helps you track the regulators, helps you identify changes in law, helps you even identify prospective changes in law.

And then it automatically connects that change or potential change to the areas of your business that are or could be impacted.

What we’re building is a $2.4 million-a-year subscription product that they’re already paying for.

We own the IP and will be showing it to other potential customers next year.”

Innodata (NASDAQ:INOD) artificial intelligence software is winning major new contracts.

“…We’re under strict NDAs, so I cannot refer to any customer by name.

But when people talk about the Big Five, they are referring to Amazon, Apple, Microsoft, Google and Meta, and we are able to say without violating NDAs that of those five, we are now working with four out of the five.

Large language models are a class of generative AI that is widely associated with OpenAI’s GPT-4 and ChatGPT.

The Big Five technology companies are super-focused on this technology, which has been widely reported and which they each have talked about publicly.

They’re in a veritable arms race to build competencies and leadership in these technologies and we are privileged to be a part of their journey.”

The Innodata Inc. (NASDAQ:INOD) CEO details some of these successful contracts.

“That is a program we recently announced with a large cloud provider — one of the recognized hyperscalers — under which we will be providing AI data engineering to its customers.

The primary business of the hyperscaler is selling compute and storage.

That’s their primary business.

They’re very well positioned to benefit from generative AI, because it is compute and storage intensive.

Therefore, to capture this market opportunity, they’re very committed to having a full ecosystem of capabilities that a developer needs in order to build and deploy and manage large generative AI models and applications.

One of the things that’s needed is data engineering.

In our deal with the hyperscaler, it stands up a data engineering offering and we fulfill it.

So the exciting thing about that for us is —well, there are several but I’ll name two. The first is that it’s an opportunity for us to scale, standing behind the brand and the distribution that one of the largest technology companies in the world has.

Our constraint is always our own sales and marketing, which is just eight people presently in our AI solutions and services area.

How do you really make a dent in the world with eight people, once you get beyond the areas of concentrated spend in this area?

The white label program enables us to potentially overcome that limitation.

We don’t need to do the selling — they do the selling, they do the marketing, we do the execution.

So that’s the first thing.

The second thing that’s really super-cool is virtually every company in the world right now is thinking,

“What will our AI strategy be? What will our large language model strategy be? Where do we integrate? Where do we build our own? Where do we fine-tune? How do we fine-tune? How do we use our proprietary data assets with these technologies without compromising our data?”

They’re all thinking about these things, but the earliest adopters are doing something about it.

By virtue of this white label program, we will be again in a privileged position to work with those earliest adopters, learn a lot, experience a lot, see what the use cases are and grow with it such that when the early majority heads our way, when the majority comes calling, we are going to be progressively in a better and better position to help them achieve their goals.”

Get the complete strategy picture for Innodata (NASDAQ:INOD) and the development of its artificial intelligence software by reading the complete interview with CEO Jack S. Abuhoff, exclusively in the Wall Street Transcript.