Mr. Gabriel Rene reports

VERSES PROVIDES Q3 2024 CORPORATE UPDATE

Verses AI Inc. has provided a corporate update.

"As we work towards getting Genius into the hands of more developers and publish meaningful research that paves the way to our upcoming benchmarks, we believe that Verses is well positioned to influence the direction of the AI [artificial intelligence] industry," said Gabriel Rene, chief executive officer of Verses.

"Recent commercial agreements, strategic funding and recognition by respected research firms like Gartner are signals that others share our vision and support our alternative approach to creating intelligent systems," continued Mr. Rene. "Genius is a new class of software and the problems we're tackling, along with their solutions, are as much logical as they are technological. We are now more clear and more focused than ever on how to deliver Genius and the benchmarks."

Commercial projects

Verses recently entered into the first joint smart cities project with Analog, an edge computing company focused on seamlessly connecting people, places and things using smart sensors and mixed reality devices. This project is centred around taxi fleet management in Abu Dhabi with the objective of utilizing Genius to optimize fleet operations while minimizing congestion and emissions.

This pilot project is the first in a series of commercial projects that Verses and Analog, both G42-financed companies, are in talks to develop together in Abu Dhabi with expected initial generated revenue for Verses of approximately $3-million (U.S.). Leveraging Genius, future initiatives in Abu Dhabi intend to focus on projects in key sectors such as smart mobility, healthcare, and energy.

Verses CEO Mr. Rene and Analog CEO Alex Kipman recently conducted a webinar to discuss this agreement, as well as their visions. The replay will be available on Verses' website.

Operations and financial updates

James Hendrickson was promoted to chief operating officer to lead the internal organization to meet the staffing, operations and financial initiatives that prepare Verses for the future. Operations have already become more streamlined resulting in a 30-per-cent reduction in monthly costs and steps are being taken to prepare the company for easier access to U.S. investors and U.S. markets.

Former chair Jay Samit moved to an executive role with Verses as head of global partnerships and Michael Blum was announced as the new independent chair. Mr. Blum is a co-founder and president of Hedgeye Risk Management, a premier independent investment research house whose customer base advises more than $10-trillion in assets and operates in close to 100 countries. In 2014, Mr. Blum co-founded Firefly Space Systems which designed and developed space launch vehicles for small payloads working with, among others, NASA, DARPA and Boeing. Previously, Mr. Blum was the co-founder and chief operating officer of hedge fund Falconhedge Partners LLC. Prior to this, he spent seven years in Silicon Valley, including at Paypal, developing business and product strategy. Mr. Blum received his bachelor of arts in economics and international studies (honours) from Yale University.

Genius rollout

Verses began its Genius beta program earlier this year and is continuing to work with a targeted group of developers and expects the program to expand with new partners this quarter. The company also announced completion of a research collaboration with NASA Jet Propulsion Laboratory (JPL), which successfully demonstrated cross-platform interoperability between Digital Twin (DT) systems for lunar explorations. The project is part of a research phase of the Genius beta program. Verses, in partnership with the Spatial Web Foundation, worked with JPL researchers to model data using Spatial Web standards with the objective of allowing government agencies, private sector aerospace entities and universities, each having different technology stacks, to collaborate in a unified real-time simulation of the lunar surface.

Research and benchmarks

Verses' research team, led by chief scientist Dr. Karl Friston, published more than 25 papers in Q3, among which is a paper titled "From pixels to planning: scale-free active inference," which introduces an efficient alternative foundation to deep learning, reinforcement learning and generative AI called renormalizing generative models (RGMs) that address foundational problems in artificial intelligence (AI), namely versatility, efficiency, explainability and accuracy, using a physics-based approach. RGMs are a versatile universal architecture that can be configured and reconfigured to perform many or potentially all of the same tasks as today's AI but with far greater efficiency.

The paper describes how an RGM achieved 99.8-per-cent accuracy on a subset of the MNIST digit recognition task, a common benchmark in machine learning, using only 10,000 training images (90 per cent less data than conventional testing). Sample and compute efficiency translates directly into cost savings and development speed for businesses building and employing AI systems.

This and other research lay the foundation for providing results against several industry benchmarks, including the previously mentioned Atari 10k Challenge and Melting Pot Challenge.

Events

Verses research presented 12 accepted papers at the International Workshop on Active Inference (IWAI), the largest conference dedicated to active inference, a field pioneered by Verses chief scientist Prof. Friston. IWAI organizers informed the company that attendance at the sold-out event increased by 40 per cent year over year and the number of papers submitted increased by 70 per cent, which indicates that active inference is gaining momentum among AI researchers. Themes explored across the research include advancing the foundational capabilities and efficiencies of active inference, multiagent systems, real-world applications, emotional and social intelligence, ethical and sustainable development, as well as transparency and explainability.

At the Digital Twin Consortium in Chicago, Michael Wadden presented a keynote entitled "Digital Twin Interoperability for Lunar Exploration" based on the VERSES work with JPL."

Spatial Web protocol, architecture and governance standards

On July 24, Verses announced that the Institute of Electrical and Electronics Engineers Standards Association (IEEE-SA) P2874 working group voting members approved the Spatial Web standards: hyperspace modeling language (HSML) and hyperspace transaction protocol (HSTP).

The Spatial Web is a hyperconnected, ethically aligned network of humans, machines and intelligent systems. HSML and HSTP provide standard formats for structuring multidimensional information in a unified format that includes the rules, requirements and restrictions that govern how AI and related systems can interact. The final steps before IEEE publication later this year include addressing comments from the non-approval votes and verification by a review committee. Future plans for the working group is expected to include developing reference implementations and exploring governance requirements for various industries. Genius will be the first product to support the Spatial Web standards.

Gartner

VERSES was recognized in Gartner's 2024 Hype Cycle for Artificial Intelligence report. Listed in the section of the report titled first-principles AI (FPAI), the report states that First Principles AI is transformational and "n the rise. In the discussion of why this is important, the report states that "FPAI instills a more reliable representation of the context and the physical reality, yielding more adaptive systems. This leads to reduced training time, improved data efficiency, better generalization, and greater physical consistency."

According to the business impact section of the report, "FPAI helps train models with fewer data points and accelerates the training process, helping models converge faster to optimal solutions. It improves the generalizability of models to make reliable predictions for unseen scenarios, including applicability to nonstationary systems, and enhances transparency and interpretability, boosting trustworthiness."

About Verses AI Inc.

Verses is a cognitive computing company building next-generation intelligent software systems modeled after the wisdom and genius of nature. Designed around first principles found in science, physics and biology, its flagship product, Genius, is a toolkit for developers to generate intelligent software agents that enhance existing applications with the ability to reason, plan and learn.

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