Essay by Ethan Edwards: “In 2018, McKinsey Global Institute released “Notes from the AI Frontier,” a report that seeks to predict the economic impact of artificial intelligence. Looming over the report is how the changing nature of work might transform society and pose challenges for policymakers. The good news is that the experts at McKinsey think that automation will create more jobs than it eliminates, but obviously it’s not a simple question. And the answer they give rests on sophisticated econometric models that include a variety of qualifications and estimates. Such models are necessarily simplified, and even reductionistic, but are they useful? And for whom?
Without a doubt, when it comes to predictive modeling, the center of the action in our society—and the industry through which intense entrepreneurial energy and venture capital flows—is artificial intelligence itself. AI, of course, is nothing new. A subdiscipline dedicated to mimicking human capacities in sensing, language, and thought, it’s nearly as old as computer science itself. But for the last ten years or so the promise and the hype of AI have only accelerated. The most impressive results have come from something called “neural nets,” which has used linear algebra to mimic some of the biological structures of our brain cells and has been combined with far better hardware developed for video games. In only a few years, neural nets have revolutionized image processing, language processing, audio analysis, and media recommendation. The hype is that they can do far more.
If we are—as many promoters assert—close to AIs that can do everything a human knowledge worker can and more, that is obviously a disruptive, even revolutionary, prospect. It’s also a claim that has turned on the spigot of investment capital. And that’s one reason it’s difficult to know the true potential of the industry. Talking about AI is a winning formula for startups, researchers, and anyone who wants funding, enough that the term AI gets used for more than just neural nets and is now a label for computer-based automation in general. Older methods that have nothing to do with the new boom have been rebranded under AI. Think tanks and universities are hosting seminars on the impact of AI on fields on which it has so far had no impact. Some startups who have built their company’s future profitability on the promise of their AI systems have actually had to hire low-wage humans to act like the hoped-for intelligences for customers and investors while they wait for the technology to catch up. Such hype produces a funhouse mirror effect that distorts the potential and therefore the value of firms and all but guarantees that some startups will squander valuable resources with broken (or empty) promises. But as long as some companies do keep their promises it’s gamble that many investors are still willing to take….(More)”.