Caveats of Artificial Intelligence

Artificial Intelligence and machine learning are two of the hottest buzzwords in business right now – and the majority of executives have hurled themselves onto the bandwagon.

The IBM Developer profile on Linkedin recently shared a third party report stating that “80% of business leaders view AI as a strategic priority.”

Why?

The generic responses we have heard and observed most is that executives feel artificial intelligence provides an opportunity to drive operational efficiencies and understand their customers better.

What does that mean?

Sometimes business jargon is intentionally generic. Understanding customers better is an easy use case to identify. You feed metrics into an AI model and it will provide enhanced insights into your customers, and may provide prescriptive and predictive analytics. These models can continue to evolve as a constant stream of data is fed into them.

But what about the ultra-generic “drive operational efficiencies” bit?

Well, the most common tactic this generic phrase actually translates to is salary elimination. Executives don’t like to admit this for many reasons, and it’s understandable why. Would a fresh graduate of one of the thousands of MBA programs want to work for a company that was constantly pursuing ways to eliminate their job? Probably not.

This leads us to our first caveat of artificial intelligence:

Artificial intelligence is already being used in the boardroom to eliminate jobs.

So why is this problematic? Isn’t this just “good business”? That depends on one’s perspective. An individualistic perspective would have no issues with using AI in this way. However, an altruistic perspective would have serious concerns with this, because employment is THE linchpin of the economy.

Now some would say that when an innovation kills one job industry, it creates another one – and generally, they are correct. However, a quick perusal of the research on the finance industry has showed that technology killed far more jobs in finance than were created in technology; so the net effect is still negative – and consequently, detrimental to the economy.

Perhaps the most interesting aspect about the executive bandwagon for artifical intelligence adoption is the fact that they don’t fully understand it’s potential.

Most executives think that the technology is at a point where a computer can learn completely on it’s own; as if there was a consciousness present like a human being; hence the term “artificial”. However, this isn’t true.

What is actually taking place within artifical intelligence mechanisms isn’t “artifical” at all; it’s actually machine intelligence. There is not a conscious human being at the center of the models, but rather a machine. The machines have to be constantly fed data, and they lack the intuition of a human being. So with a fundamental understanding, companies are investing billions into this technology hoping to achieve an outcome that can not be achieved right now. Oops. This leads us to our next caveat:

Executives have fundamentally mis-understood what articial intelligence actually is – and the actual value it can deliver.

Pity the fools who lets any of their experienced talent go out of greed that some computer is going to magically replace the intuition, experience, emotional intelligence, and soft skills of a human being.

Sadly, greed has already overtaken many of the initiatives driving artifical intelligence in the boardroom – and ironically, much of them will likely blow up in the executives’ faces. Poetic justice, no?

But the boardroom isn’t the only place where caveats for machine intelligence reside. Pitfalls reside within the venture capital market as well.

As a private equity firm, we have a constant pulse on machine intelligence ventures.

We see new AI ventures every week on average – and many of them in one form or another are designed to eliminate jobs. From security companies to burger flipping robots; new technologies continue to arise that will put many out of work.

This raises a paramount ethical dilemma for investor whom are trying to find a healthy balance between capitalism and altruism. It’s also another caveat of the industry:

There are ethical and philosophical issues to address when investing in machine intelligence.

Is it ethical to invest in a business whose primary value proposition is to eliminate jobs? Many investors may be quick to say, “Yes, this is just fine, as it’s good business.” But a hard lesson many have learned is that sentiments tend to change the closer to home the issue hits.

Many investors now may have no issues with investing in these technologies; but what happens when these very technologies starts putting their friends, family, and even themselves, into the unemployment line? Will their tone change then? If so, then some could argue that to invest in those specific ventures is to commit a hypocritical dis-service to humanity.

The goal here is NOT to demonize machine intelligence, but rather to bring the caveats into balance with the benefits.

It’s only fair at this point to list at least some of the benefits that machine intelligence provides, because there are many:

• Enhances customer value generation
• Improves medical diagnosis outcomes
• Enables quicker security threat detection
• Drives effective investment in key initiatives
• Allows for great visibility into business operations

Sadly, machine intelligence has already been touted as the next greed-infested “gold rush” in business; which is yielding a short-sighted perspective that causes many to overlook just how valuable this innovation can be to society.

What’s ironic is that many entrepreneurs, executives, and investors don’t seem to realize that machine intelligence does not have to be used exclusively as a mechanism for eliminating jobs in order to generate value creation and profits.

If an example is needed to give our philosophy credence; perfect. Look at Monogram Orthopedics. This venture’s technology is designed to empower better surgical outcomes; as part of a process requiring technology AND human beings. Impressive.

Machine intelligence can provide immense value when deployed in conjunction with humans, leveraging the strengths of both parties; in nearly every industry in some form or another. In fact, these are the uses cases where machine intelligence has already been proven to provide seismic value; so why not dedicate time and resources to fully develop those opportunities?

It’s one thing to achieve great things; but it’s another to achieve great things and be able to sleep well at night.

Blessings.

Citations:

IBM Developer Linkedin post:
https://www.linkedin.com/posts/activity-6686293065835040768-XHDL