How much is that painting worth? Why is your painting not worth a dime whilst Leonardo’s Salvator Mundi sells for $450 million?  It can depend on the reputation of the artist, on the age of the painting, on its subject, but also on many many many other factors. Appraising artwork is a tough and very subjective job, where art experts examine and balance all of these factors. The expert eye of the art connoisseur is, so far, the only way that we have to value artworks that can fetch millions and millions of dollars on auctions.
Some startups have tried to come up with algorithms to predict potential auction prices, but predictions rates haven’t been much better than guessing . Valuation of art is an art (pun intended), and hasn’t changed very much in a very long time. The market is ripe for disruption.
Auction houses are not standing by. Recently Sotheby’s acquired Thread Genius  a startup that provides algorithms to identify objects and recommend similar objects to the user. Thread Genius is fundamentally a visual search engine that relies on convolutional neural networks  to analyze patterns, shapes, colors, strokes that can be trained on specific purposes: even if it started with clothes recognition for the fashion industry, its deep learning capabilities were soon translated to paintings.
Thread Genius is the first step in systematizing the appraisal method: by finding comparable artworks, appraisers can better benchmark their estimates, but it’s a short-term initiative. The lack of long-term disruptive usage of machine learning creates an opportunity for large auction houses and art dealers/galleries to innovate and disrupt.
My recommendation to Sotheby’s is to stay ahead of the game in deep learning. Competitors are most likely going to jump on the bandwagon of machine learning and, despite its smart move with the Thread Genius acquisition, Sotheby’s can’t afford being an old fashioned auction house in the world of machine learning. Sotheby’s has access to an enormous database of past transaction onto which it can train the most advanced feed-forward machine learning algorithms. Not only it has the potential to become the Netflix of the arts, suggesting art pieces that you might like based on your past preferences, but it needs to strive to understand the potential value of artwork and eventually maximize the capture of value by optimizing its pricing.
The next episode for artists, galleries and dealers will come when deep learning will get so good to actually generate the art itself, to come up with something entirely novel and revolutionary, surprising humans and triggering new trends and new possibilities.
It seems so futuristic but it is happening already. Sotheby’s competitor Christie’s recently sold the “Portrait of Edmond Belamy” for $432,500 . The portrait was generated using generative adversarial neural networks, a class of algorithms that can create so realistic looking images that can be difficult to discern from a human’s work or so realistic even realistic videos for events that have never actually happened (deepfakes).
Artistic product development as a whole will be impacted by the change, Google is already experimenting with computer generated music and went as far as creating an entirely new and AI-designed musical instrument  whose sound doesn’t resemble anything that we have build before. IBM is betting that AI can generate new scents and fragrances , an art that so far had been a privilege of few good noses.
Everything we consider art can be impacted by the tide of machine learning, and incumbents need to be ready to embrace it as an opportunity to create, appraise and trade new art, maybe in conjunction with human judgement, but maybe, who knows, even without it!
Machine learning and AI is reshaping every industry and art might be one of the toughest to disrupt but eventually the wave of change will get there too, and even in this whole push towards a more digital art world some questions remain unanswered.
Will a computer ever be able to appreciate an value the artistic breakthrough of Marcel Duchamp’s fountain? Or Lucio Fontana’s cut canvas?
Will machine learning bring increased price transparency and subsequently increased liquidity into the art market?
If machine learning were to become very good at pricing art pieces, will we still need auction houses? Or will they transform into stock exchanges?
As deepfakes become more and more realistic and widespread, will the value of real authentic art become jeopardized?
 “Artificial Intelligence For Art Valuation – A Review By Artmarketguru”. 2018. Artmarketguru. https://www.artmarket.guru/le-journal/technology/ai-art-valuation/.
 “Is Artificial Intelligence Set To Become Art’S Next Medium? | Christie’s”. 2018. Christies.Com. https://www.christies.com/features/A-collaboration-between-two-artists-one-human-one-a-machine-9332-1.aspx.
 “Sotheby’S Acquires Thread Genius To Build Its Image Recognition And Recommendation Tech”. 2018. Techcrunch. https://techcrunch.com/2018/01/25/sothebys-acquires-thread-genius-to-build-its-image-recognition-and-recommendation-tech/.
 “Art Genius – Sotheby’s – Medium”. 2018. Medium. https://medium.com/sothebys/art-genius-1260726bfebd.
 “How Will Algorithms Change The Art Market? | Financial Times”. 2018. Ft.Com. https://www.ft.com/content/07f0fbfa-e096-11e8-8e70-5e22a430c1ad.
 “Art Market Ripe For Disruption By Algorithms | Financial Times”. 2018. Ft.Com. https://www.ft.com/content/20ae62be-41ef-11e7-82b6-896b95f30f58.
 “Forget About Chanel No. 5. IBM Is Now Making Perfume Using AI.”. 2018. Vox. https://www.vox.com/the-goods/2018/10/24/18019918/ibm-artificial-intelligence-perfume-symrise-philyra.
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 “Value Soars For Leonardo Da Vinci Drawing After ‘Salvator Mundi’”. 2018. Nytimes.Com. https://www.nytimes.com/2018/11/09/arts/design/leonardo-da-vinci-tajan-paris-renaissance-.html.