Artificial Intelligence

Just as we are surrounded by stupidity on a daily basis, an artificial intelligence (A.I.) is now all the rage. The term artificial means something man-made, i.e., not occurring naturally, so artificial intelligence is something beyond what we have experienced in the past.

When I contemplate A.I., I must use my previous experiences to understand this new phenomenon. This reminds me of an Andy Griffith comedy routine, What It Was, Was Football. I had an L.P. (long playing record for you youngsters who may read this) with this routine. I thought it was so funny, I committed it to memory and can bore people at a moment's notice with a clumsy rendition. I bring this up because, in the routine, a country bumpkin tries to describe watching his first football game. His description is all wrong as he bases it on his personal experiences on the farm. The field is a cow pasture and the football is a pumpkin in his observation.

As we are all now already experiencing the effects of A.I. in our daily lives, I thought I would try to go beyond my existing experiences in computing to try to understand what everyone is discussing as our future. With A.I., the future is now and what lies further down the path is a mystery to even the developers.

If left to my own devices, I would relate A.I. to a database that stores and retrieves structured data. I have experience with databases from my work with computers. They are simple to understand but fall far short of an understanding of A.I. While a database is like a librarian with access to a vast collection of books on a variety of topics, A.I. is like that same librarian with the ability to read all these books, understand all that is written, and use that information to form new ideas based on this data.

This means that A.I. can perform tasks that normally require human intelligence. Things like problem-solving, reasoning, and language understanding. It does this using complex algorithms that look for patterns to make predictions using machine learning. A.I. can create new content based on its understanding of what it has processed.

A.I. is not perfect so our trust of its conclusions needs to be tempered with a proper understanding of its limitations. While it is a wonderful tool, it should not be implicitly trusted. It can and will make mistakes, just like humans. There is something known as algorithmic bias when machine learning algorithms develop discriminatory outcomes based on existing socioeconomic or racial/gender biases. With this in mind, I would suggest that we follow Ronald Reagan’s advice to, “Trust, but verify.” It seems he stole the quote from an old Russian proverb, "Doveryai, no proveryai."

We have just scratched the surface of A.I. and our future will be formed by it. You won’t be able to ignore it as it will be everywhere. It is affecting your life now and it will impact it even more in the future. There will be a restructuring of our economy as jobs disappear and new ones are created.

The troublesome part of this new technology is that it comes at a cost, a huge cost. It requires vast amounts of our limited resources. The required data centers need enormous amounts of power which consumes fuel and requires water for cooling. Our aging leadership is ill-equipped to deal with this new wrinkle in the world. I think most of us would agree that they can’t deal with much of our world before A.I.

The current administration is against regulations and is primarily concerned with profits, particularly personal profits. I don't believe the president understands where we are or where we are going. His motivations are personal and financial, not national. Sharing our technology with potential enemies may bring a few quick profits, but national security may be threatened by such selfish actions. Left unregulated, we will most certainly be left with enormous problems. Another concern is that A.I. is driving the current economy and is responsible for most of its recent gains. This is all based on speculation as most industries have not yet figured out how to monetize this new “product.” The A.I. bandwagon is rolling down the mountainside at breakneck speed, carrying the fortunes of public pensions, retirement accounts, and regular investments along with it.

Many economists are sounding the alarm of an A.I. bubble similar to previous “bubbles” that have burst leaving taxpayers to bail out the speculators. At some companies, jobs are already being slashed. Expect software employers and those where automation from A.I. can be implemented, to cut work forces. Inside, the workings of each corporate A.I. offering are a carefully guarded secret. Even engineers working on segments may not understand the big picture. It has the power to sway public opinion, sway elections, and it can fabricate misinformation.

As I have no control over the future of A.I., I will resign myself to enjoy its rewards. I will still use “Google” to do my research, and I will give consideration to its responses. I will enjoy the ability to edit my photographs to remove unwanted obstacles and generate a new background. I will continue to ask Alexa questions. I will enjoy spam filters and language translators. I will listen to music curated for me based on my own lists. I will still be amazed at the ridiculous recommendations from Netflix based on “my viewing history.” I will still enjoy the fact that my Google maps is using real-time traffic updates to optimize my route.

I will leave you with a quote from our subject. I posed the question, “What are the financial risks of A.I.?” This is the scary response:

“The financial risks of AI include systemic risks like flash crashes from herding behavior, increased cyber threats (data poisoning, fraud), model failures due to bias or poor data, and significant operational risks from third-party reliance and lack of transparency, leading to regulatory challenges, potential consumer harm (discrimination, deepfakes), and market instability.”

I suggest that you copy and paste my question into your own search A.I. engine to get an expanded explanation of what all this means. I can also suggest you search for the topic, “The Risks of Generative AI Agents to Financial Services,” from the Roosevelt Institute, by Todd Phillips. Then get out your smartphone and put in an order at the liquor store. It will be good to have an adequate stock before the A.I. apocalypse.