Austrian AI: from academia to commercial success and beyond

Austria has established itself as a European frontrunner when it comes to artificial intelligence exploration and, importantly, deployment

Austria’s success in artificial intelligence (AI) research and development largely stems from an academic realm of young thinkers, budding entrepreneurs and established professors injecting AI into a range of industries and even back into academia itself. 

Berlin is often cited as the hub of central European innovation, thanks largely to its promotion of startups and the positive relationship between universities and businesses. Austria is no different, however, with the Graz University of Technology in particular becoming a global leader for studying AI and extended reality (XR), aided by some of the world’s leading professors.  

While technical exploration in academic settings isn’t unusual, what does stand Graz, and Austria more broadly, apart is the ability to force a transition from academic theory and trialling to commercial success. 

Moreover, the ability to transcend both public and private-facing sectors with these applications has become a hallmark of Austria’s AI journey so far. 

“Austria, despite its small size, has a very strong academic research community around AI and augmented reality [AR]. Simply because of the country’s wealth, we can certainly invest more into this than others,” says Philipp Grasmug, co-founder and CTO at Reactive Reality.

“Graz is particularly renowned for AR, especially the group surrounding Dieter Schmalstieg, who is the head of the Institute for Computer Graphics and Vision ([CG)]. He alone has received multiple awards for his work in the field of AR, is the author of the definitive book on AR, and continues to inspire and support the work we and many others do.” 

Powered by AI or just ‘providing’ AI? 

The work that Reactive Reality does exists in the retail sphere as a virtual “try-on” application for fashion retail and ecommerce. It is a partial brainchild of Schmalstieg, who developed the solution nine years ago alongside Grasmug, Stefan Hauswiesner and Philipp Pani. It allows customers an opportunity to visualise products on their own body before purchasing online – a benefit that took on extra prevalence and value during peak-pandemic, but that was far ahead of its time at inception. 

“Reactive Reality was an early adopter of AI,” Grasmug says. “We started using AI for automation, in particular for content creation, which needed to be scalable for our business to grow. For this reason, we now have a dedicated team which builds and trains state-of-the-art AI.” 

Grasmug concedes that this R&D focus isn’t abnormal within scaling companies now, but it certainly wasn’t typical at the time of Reactive Reality’s fast initial growth – even now there is still often a lack of internal expertise that prevents businesses from fully exploiting their developed solutions. 

“If you look at it from a marketing perspective, this unfortunately doesn’t make a huge difference,” says Grasmug. “Since, for the client or consumer, it is often very difficult to distinguish between a service that is powered by AI [and a team of experts] and one that simply provides an AI-supplemented service which isn’t particularly innovative and instead reuses existing products. 

“The fact that it is impossible to tell the difference in the purchasing process, which certainly makes it harder for us to position our offerings and stand out, but from inside the ecosystem we can see this subtle differentiation as something that Austrian businesses are often better at.” 

Pivotally, it’s a subtle difference that becomes a huge difference for consumers and end users, even if they don’t yet realise it. 

Personalised education 

An example of an Austrian innovator ramping up its “AI power” is GoStudent. Initially founded to match students with suitable online tutor​s, taking into account their specific learning needs​, its own suitability with AI has always been clear. After becoming Europe’s first unicorn in the edtech space, and enjoying faster-than-expected funding round traction, the aim now is to make the solution even more customised and personalised. The vehicles to achieve this? AI and virtual reality (VR). 

“Starting with VR, we recently successfully​ launched GoStudent VR across Europe. W​e distribute VR glasses to students taking ​GoStudent VR ​language courses to provide a much more immersive overall experience,” says co-founder Gregor Müller.

“The whole point of GoStudent is to make the learning experience more personal to each student and to the expertise of each teacher. ​GoStudent ​VR is allowing us to take students to Paris to practice their French, for example, while it’s also allowing for more dynamic classroom environments which the teachers really enjoy.” 

​​GoStudent VR​ is designed not only for the students to flourish if they operate better in group sessions, but it is a way for tutors to be more creative in their use of technology. Teacher buy-in is naturally crucial with any digital disruption to academia and education, and is the partial basis for GoStudent’s recent AI evolution.  

Müller continues: “We’re using AI to improve the lessons teachers can provide. Our lesson planner can be formulated automatically, or through partial automation, saving teachers valuable admin time, while also ensuring complete personalisation for each student. 

“The lessons are formed using AI, based on data around what was taught last time, how far that student got, what they struggled or excelled with, the topics they or their parents have signalled as a priority, and everything that is unique to that user. Usually, it would take a lot of manual preparation for a tutor to be that flexible to each different pupil. AI removes that strain to ensure much better outcomes.” 

Balancing ambition and realism 

AI is also being used by GoStudent to produce follow-up lesson summaries, again reducing the extent of admin for each teacher, while also giving students and their parents much more immediate and detailed feedback. 

It’s a poignant reflection of how Austria’s relationship with AI has come full circle so far, from its origins in the classroom, to a global audience of enthusiastic learners and future innovators. 

Of course, this circle encompasses a plethora of industrial use cases and business success stories too, as evidenced by Reactive Reality, which praises the country’s practical approach to automation. 

“At this point, just like our journey to now, it’s about balancing ambition and realism,” Grasmug says. “We know that AI is not a magic solution that solves every problem overnight, but rather another tool in the ever-growing digital toolbox – indeed, a very powerful one if you know how to leverage it.  

“We’d like to think we’re one of many Austrian exponents who do know how to [leverage AI]. We have a strong engineering team with the skills to develop and train the next generation of AI solutions. We know how to master this tool and we look forward to pushing further and accelerate the fields of computer graphics, vision and deep learning.” 

A successful leap 

Just like retail and the consumer segment, educators and students have also been seeking a level of digital disruption that puts them first. It’s not just AI for AI’s sake, but a solution formed off the back of an identified user challenge. 

Müller concludes: “We have always had to ask, ‘Is this something that kids will enjoy, is it something that will make teachers’ lives easier, is it something parents will allow?’. We’d like to think that by putting a valid business case forward first, AI and VR becomes more than just a trend – it’s truly a solution.” 

More than most, Austria seems to have made this successful leap with AI. A leap from academic theory, through the innovation filter, to solving lived challenges among society. 

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