I have been reading and watching different takes from really smart people on artificial intelligence. 60 Minutes ran a segment where they interviewed Google people about AI, and Google advocated for its book. Traders will get what I mean. I saw the first Tucker Carlson segment with Elon Musk, and he advocates for government regulation of AI. He sees a lot of potential danger with it. Microsoft has invested in ChatGPT so they are in the game. Musk himself set up a new AI company with a corporate charter in Nevada that is non-profit.
If you want to see something kind of cute when it comes to AI, Brad Feld’s blog has a cute video of an AI rabbit.
To simplify your understanding of AI if you don’t understand it here is a very simplified description. Artificial intelligence is in fact artificial. It’s just a bunch of algorithms trained on data sets and programmed to spit out information. What the AI is trained on and how it is trained makes all the difference.
You could train an AI algo to eliminate any threat of climate change to any decision. You could also train an AI algo to overestimate the threat of climate change to any decision. AI doesn’t decide that for itself.
I think it’s hilarious when people say, “AI could write blog posts for you”. If that’s what you want in a blog post, your blog will be pretty lame and boring. Very corporate, but frankly, name a corporate blog that is engaging.
Everyone knows that AI will eliminate a lot of jobs. With every single technological innovation, positions are eliminated. The printing press put transcribers out of work. Of course, current AI could put the bulk of journalists out of work already today since they are so brain-dead. Of course, new jobs are created, and we really don’t know what they will be, hence the creation of fear in the conversation and human psyche. When there is fear, people turn to the government to solve it but we know that isn’t the correct way to deal with fear.
However, one thing that is left unsaid about technological innovation is that the ones that are really great at whatever it is will be even greater if they utilize it. The best attorneys will still be the best with AI as they were before AI and they will realize even more profit than before.
AI should also create a lot of abundance in a large variety of supply chains. Manufacturing and farming should get a lot more efficient. Decision-making for a lot of commoditized processes will go faster. AI should drive down the cost of a lot of things so that standards of living improve for people with fewer resources.
The other thing significant technological advances do to marketplaces is to centralize them. Instead of lots of little players, there are a few big players. The little players get the crumbs and the big players vacuum up everything else. In law, look for Big Law to get even bigger and more powerful. AI in finance isn’t going to enable lots of new competition. It will enable the big guys to get bigger.
AI layered with quantum computing will make it hyperfast. It will be cool, and frightening all at the same time. Imagine the speed of drug discovery with technology like that.
I am torn on the idea of a non-profit AI. In my experience, nonprofit isn’t the best for humans nor is it the path to even greater innovation. Henry Ford didn’t sell cars at cost. As the late entrepreneurial professor Paul Magelli said, “If you don’t make a profit, it’s a hobby.” But, Musk advocates for it being a non-profit vs Google/Microsoft’s obviously for-profit efforts.
But, here is my biggest fear with AI.
I am in the hospital. An AI assistant runs the probability of my survival and finds that it will take a miracle for me to survive. However, my family and I want to try some treatment that will potentially bring about that miracle. The medical system doesn’t want to do it and would prefer to let me die. In addition, the government regulators would prefer to let me die as well because of the treatment cost, the ongoing cost to the government for my social security and medical benefits, and other costs to society. They give my family a choice: pay an exorbitant amount of money to take the chance or let me die. If they give me a shot that kills me quicker, maybe there is a small monetary token of appreciation that is just under the net present value of the costs.
If Behavioral Economists are the ones setting the rules behind AI, our society is in deep trouble. Cass Sunstein and Dick Thaler’s view of the world is a lot more sinister than Milton Friedman's and Richard Posner’s. “Nudge” on steroids is what the world would look like. The nudge would turn into a shove.
AI could take a lot of “free to choose” out of your life. You can imagine a lot more instances yourself. Do you remember that driving trip where you saunter off the beaten path to discover things? Not going to happen with AI cars because it won’t let you since it’s not the most efficient and we need to utilize that energy somewhere else in the economy where it can be used efficiently.
Imagine an AI world with a digital US dollar. Might as well go to the Gulag now. For what it’s worth, a digital US dollar managed by the federal government is one of the more innocent-looking but totalitarian ideas I have seen in my lifetime. Hence, it is not a good idea for those of us that value freedom.
AI potentially decreases variance. It is the variance that makes us human and is the spice of life. It’s also variance where real innovation and improvements to our standard of living happen. It’s not the predictable ones that change the world, it’s the crazy ones.
I was out in Miami on an engagement recently and was talking to this young lady who i overheard at the club my client was part of. She is an OF model. She was joking about the money. I laughed and she looked at me. I told her in no uncertain terms that she had at most 3 years, more likely less than 2 years and to "harvest" every penny from OF for the next two years and to not spend a penny and invest it wisely and start looking for something else to do. It would be dead within 3 years, max. She was incredulous and laughed back at me that it would never end. I told he the combination of video generation models and chat and voice models all being able to utilize hyper aware AI models to cater individually to every person on earth would come first to porn (she was not old enough to understand that all new techs come first to p***) and would render humans worthless for the industry for at least 15 if not 20 years before a comeback of live. The first to go would be OF. The owners of OF are not stupid. In fact they are quite smart. They see that an investment in AI means keeping 100% of the money, not 30%. She wasn't laughing at the end. Maybe just smart enough.
Excellent, Jeff! I am reminded of an article written a few years ago about over-relying upon technology. As I recall, someone drove their car off a cliff because they were following the GPS versus their eyeballs. A couple got stranded in an Oregon blizzard because GPS directed them to “saunter off” the (plowed) interstate highway. It took them on what, in summer, might have been a clever short cut. In winter, the “AI” (GPS system) didn’t factor in lack of road maintenance/plowing. The couple nearly died from trusting technology over their own senses, intuitions, and common sense.