In a sign of Vancouver’s growing presence in the artificial-intelligence segment of technology, Japanese technology giant Fujitsu has picked the city as its international headquarters for AI services.

It is a relatively small beachhead at this point, about 20 employees now, up from nine senior employees who relocated from Japan last fall, said vice-president Dean Prelazzi, but Vancouver is a strategic location for the enterprise.

And Fujitsu’s official opening last week was the second significant ribbon-cutting in as many months.

RBC Royal Bank, in May, opened a research institute for artificial intelligence under the name Borealis AI, with around 90 researchers and employees including 30 at its office in Yaletown.

“Vancouver is an emerging city in AI research thanks to an already established talent pool in visual computing and graphics,” said Foteini Agrafioti, head of Borealis and RBC’s chief science officer.

Agrafioti said it has been a natural transition from the city’s strength in videogames and post-production into virtual and augmented reality, which use reasoning and inference skills that are key to artificial intelligence.

The city also has a critical mass of some 100 to 150 companies operating in what is referred to as applied AI, said Handol Kim, vice-chairman of the non-profit industry association AI in B.C.

“It is actually a very, very strong local community anchored by top (research) programs at UBC and SFU,” said Kim. “B.C. has a very large and robust ecosystem, but until now there has been no profile about AI and machine learning in B.C.”

Fujitsu’s new subsidiary is separate from the company’s existing Canadian operations that employ 1,200 in the country, Prelazzi said, and is the first time the company has located such an enterprise outside of Japan.

“Vancouver doesn’t seem to get a lot of attention in the mainstream tech media for its AI capacity, for whatever reason,” said Prelazzi, but it is probably Canada’s second-biggest hub for startups and research and development in the sector.

Fujitsu is a global Fortune 500 company with 136,000 employees around the world. Prelazzi said it moved this enterprise, under the name Fujitsu Intelligence Technology, out of Japan to have better access to a key market in North America.

Forecasts estimate that 75 per cent of investment around the world in AI is going to come from this continent, Prelazzi said.

“So just a huge amount of growth and engagement (with respect to artificial intelligence) in North America,” he said.

Artificial intelligence, using computing power to analyze data, predict outcomes and learn from the process faster and more accurately than humans, is becoming an essential service in many industries.

In one example, Prelazzi said Fujitsu Intelligence in Vancouver recently struck a deal with the Norwegian shipping-supply firm Kongsberg to analyze data from the fuel use of its customers to develop an “optimization solution.”

The idea is to find ways of reducing fuel consumption to reduce costs and cut greenhouse-gas emissions as the shipping industry adopts stricter fuel-quality standards in the coming year.

And in Vancouver, Prelazzi said Canada has solid government policies around innovation in artificial intelligence and research and development capacity at universities such as the University of B.C., Simon Fraser University and the University of Victoria that is ripe for collaboration.

Fujitsu has a secondary reason for picking Vancouver related to another proprietary piece of technology that the company has developed, a high-powered processing chip that fits into the realm of quantum computing.

Fujitsu has invested in and is working with Vancouver-based quantum computing firm 1Qbit, Prelazzi said, and the city is a convenient hub for talent in the quantum computing sphere including the Burnaby firm D-Wave.

Prelazzi said that Fujitsu Intelligence’s plan is to expand its Vancouver operations to 50 employees by the end of the year, “and who knows what after that.”

“The growth plan is as it needs to be to handle the business.”

AI in B.C.’s Kim said Vancouver is a strategic location for recruiting both because of the existing research community here in the city and because of Canada’s visa programs for skilled workers compared with the U.S.

“We’re able to attract people, especially nationals of Iran or China,” said Kim, which between them are producing one third to half the PhD students in the field.

The skills in artificial intelligence represent a significant growth sector for B.C.’s tech sector, said Jill Tipping, CEO of the B.C. Tech Association in an earlier interview.

“There’s this growing understanding that we’ve got these huge piles of data, but making sense of it is a human, technical skill,” Tipping said. “That is probably the biggest technical growth area (in the tech sector).”

“AI and machine learning are at the forefront of a lot of investment decisions by large corporations,” Kim said. “We’re just like the mid ’90s were with the Internet in AI. Ten years from now, people won’t talk about ‘we’re an AI company,” because of course you are, it’s how you do business.”