TACKLING HYPE, BIAS & CREATIVITY: AI's THREE MORTAL SINS
AI needs less hype and more solutions like these to get the most out of it.
Artificial Intelligence’s sins:
1. Hype: buyer beware
2. Creativity: killing creativity or a new renaissance?
3. Bias: AI makes bad decisions
Today’s artwork: Ogilvy’s presentation on creativity is an actual piece of art. I recommend reading it for its message and the stunning AI-generated artwork.
This image is from the Ogilvy presentation and was created by Midjourney AI. The prompt used to make it: “An image of an agency at work but placed in the style and context of an Italian Renaissance painter, specifically Titan with his bright colors, contrasts, and shadows. The image should have a bit of ambivalence in it, much as his Pietà does.”
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1. Buyer beware of AI hype
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Buyer beware! Is AI just the latest tech HYPE or the real deal and truly transformative?
In a great read, Goldman Sachs looks at AI hype and pits AI experts against sell-side equity analysts. Spoiler alert, the experts win!
👍 Believe these hype-beating quotes from AI experts Sarah Guo (SG) and Gary Marcus (GM):
✅ SG: Misjudging the timetable of large technology shifts is a common pitfall in investing. I am all-in on a fundamental bet that this shift will drive substantial value creation, but this is a decade+ transition.
✅ SG: Distinguishing between AI marketing and AI reality will be hard work for investors. This is a highly technical field, and the state of the art changes every week.
✅ SG: Another significant risk is public and regulatory backlash against AI technology due to concerns around abuse of these technologies.
✅ GM: Be wary of the hype—AI is not yet as magical as many people think. I wouldn’t go so far as to say that it’s too early to invest in AI; some investments.... will likely succeed. But there will be a lot of losers.
✅ GM: throwing massive amounts of money at a problem doesn’t mean it will be solved.
👎 Be skeptical of research analysts (Kash Rangan (KR) and Eric Sheridan (ES). See my commentary for why:
❌ (KR) AI probably isn’t in a hype cycle. For one thing, this technology cycle isn’t being led by upstarts, which makes it less likely to fizzle out or take a long time to get going.
–Goldman was no “upstart” when it ventured into retail banking, and it didn’t work! Big companies poured money into blockchain tech. How’d that work out for them?
❌ (ES) While you never know you’re in a bubble until it pops, the vast majority of [AI] companies that have outperformed the broader market over the last several months have reasonable multiples.
–The job of an analyst is to spot bubbles! Are you kidding me? That’s literally what they are paid to do! “Several months.” Need I say more?
❌ (KR) It’s important to remember that we’re only around five months into generative AI; the first five months of cloud computing looked like nothing. So, the ability to monetize will grow.
–Yes, but cloud tech didn’t outright lie!
–Would blockchain’s path to monetization be a better comparison?
Thoughts?
👉TAKEAWAYS:
—“Maestro” Nassim Nicholas Taleb's recent tweet says it all:
”About nothing in history has been more transformative than the automobile. Yet nothing would have bankrupted you more effectively than an investment in the auto industry. Finance is the graveyard of first-order reasoning.” Taleb
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2. Killing creativity or a new renaissance?
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Ogilvy makes it crystal clear: “AI isn’t the death knell for creativity. It’s a renaissance.”
Ogilvy looks at AI from a creative perspective and declares a creative renaissance, and creativity is something they know a lot about.
The art in this report is simply stunning. Props to Ogilivy’s creative team! This report alone proves their point about creativity!
Is this the end of creativity? Or the beginning of a golden age?
“AI isn’t the death knell for creativity. It’s a renaissance.” “We are deeply engaged with all forms of generative AI, and the near-term seems clear: AI will augment human creativity—profoundly—but the organic mind will be the source of the breakthrough idea, the creative leap, and the work that rises above the clutter.”
Ogilvy has the seven AI commandments, which work as well in a bank as they do for an advertiser:
→COMMANDMENT 1: Build new teams.
We have relied on creative teams from the dawn of the creative revolution, ...we now add AI [to the team] and more.
→COMMANDMENT 2: Honor the Idea.
AI isn’t creative. It can only work with what we give it. AI is in thrall to the big idea, just like we are.
→COMMANDMENT 3: Become a connoisseur.
We can be lulled into praising soulless executions and not pushing ourselves hard enough to uncover the dramatic idea that should animate it.
→COMMANDMENT 4: Iterate.
AI is a force multiplier for creative expression. AI, ... can propose iterations our minds would have never found.
→COMMANDMENT 5: Protect artists and brands.
Jobs will change, and, yes, some will be lost, but new opportunities will open as well.
→COMMANDMENT 6: Speed production and personalization, not creation.
AI's increased efficiency will allow more time for creation.
→COMMANDMENT 7: Advertise your ethics.
When is AI a legitimate addition to the creative process? When it is disclosed. When it doesn’t deprive creators of their rights. When it doesn’t court legal jeopardy for us or our clients. When it doesn’t deceive.
Thoughts?
👉TAKEAWAYS:
—Ogilvy’s 7 Commandments will help us all focus teams on harnessing AI in any industry.
—AI will challenge us all to become connoisseurs and not simply accept AI mediocrity!
—AI must be ethical and not deceive.
—READ Commandment 7 again.
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3. Bias in AI decision making
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Team AI with humans to help DEBIAS decision-making!
Deloitte does a great job of making it clear that AI and humans need to partner to debias decision making, and it’s not just AI that is biased; so are humans!
This quote says it best:
“Biased AI algorithms can often be found in the headlines, but what is often missed is that purely human judgments in government are not without bias either. Years of research shows that human judgment is often affected by both “bias,” and “noise.”
Deloitte lays out six CRITICAL steps that can confirm the fairness of AI. As you read these 6 steps, think of banks with credit decisions:
1️⃣ Review underlying training data:
One of the potential causes of algorithm bias is biased training data. An algorithm is not biased in itself; however, the underlying training data may embed bias in an algorithm.
2️⃣ Adopt data trails through data standards
Data standards, may give context to the underlying data about how it was sourced or modified and its intended use, so developers may decide if a dataset is effective.
3️⃣ Build models with intention
AI should be developed with clear objectives, intensive research of the processes being modeled, and outreach and stakeholder engagement. This approach should be motivated by practical cost-benefit considerations but also an organization’s values and mission.
4️⃣ Deploy “red teams” to detect potential bias in AI
🔥 Red teaming is a practice where internal and external teams use AI to cause harm with the intention of exposing risks of models. 🔥
5️⃣ Develop independent governance structure
🔥 Like the risk management or internal audit function of financial institutions, agencies should keep the AI governance structure at arm’s length from business functions. 🔥
6️⃣ Operationalize ethical AI guidelines and principles
Third-party audits of AI models may help confirm bias does not go undetected for long.
Thoughts?
👉TAKEAWAYS:
—Bias isn’t new and the "inconvenient truth" lost in the hype is that AI it will likely scale it up!
—Humans need to partner with AI to help each other to eliminate bias.
—It isn’t just the AI and data that are biased; humans are too!
—No organization should allow a business line to manage an AI without governance and oversite!
—AI auditors are coming soon!
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Rich Turrin is the international best-selling author of "Cashless - China's Digital Currency Revolution" and "Innovation Lab Excellence." He is number 4 on Onalytica's prestigious Top 50 Fintech Influencer list and an award-winning executive previously heading fintech teams at IBM following a twenty-year career in investment banking. Living in Shanghai for the last decade, Rich experienced China going cashless first-hand. Rich is an independent consultant whose views on China's astounding fintech developments are widely sought by international media and private clients.
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