Google

Wednesday 13 March 2024

SuperStupidity: Are We Allowing AI To Generate The Next Global Financial Crisis?

I updated my thoughts on AI risk management over on The Fine Print recently and next on my list to catch up on was 'the next financial crisis'. Coincidentally, a news search prompted an FT article on remarks about AI from the head of the SEC. 

While Mr Gensler sees benefits from the use of AI in some efficiencies and combating fraud, he also spots the seeds of the next financial crisis lurking not only in the various general challenges associated with AI (e.g. inaccuracy, bias, hallucination) but particularly in: 

  • potential 'herding' around certain trading decisions; 
  • concentration of AI services in a few cloud providers;  
  • lack of transparency in who's using AI and for what purposes; and
  • inability to explain the outputs. 

All familiar themes, but it's the concentration of risk that leaps out in a financial context, though it was also a wider concern identified in hearings before the House of Lords communications committee and by the FTC, as explained in my earlier post. 

The fact that only a few large tech players are able to (a) compete for the necessary semiconductors (chips) and (b) provide the vast scale of cloud computing infrastructure that AI systems require is particularly concerning in the financial markets context because the world relies so heavily on those markets for economic, social and even political stability - as the global financial crisis revealed. 

We can't blame the computers for allowing this situation to develop.

So, if 'superintelligence' is the point at which AI systems develop the intelligence to out-compete humans to the point of extinction, is 'superstupidity' the point at which we humans seal our fate by concentrating the risks posed by AI systems to the point of critical failure?  


Wednesday 6 March 2024

AI is a Set of Technologies, Not The End Of Work

We've heard a lot for a long time about artificial intelligence replacing our jobs and, ultimately, the human race. We're told we'll need to retrain to do things that AI computers cannot. But beware the hype. After all, AI is just a set of technologies and we've coped with the introduction of new technology before. Rather than having to retrain, it's more likely you'll be using AI without even realising it. And there are cases where robotics are needed because humans are reluctant or unavailable to do certain tasks... The real concern is that the hype distracts us from more immediate and greater threats posed by AI and how to manage and regulate the risks appropriately.

Much of the hype surrounding AI confuses its development with its actual or potential uses, whether in business or in the course of other activities, like writing a wedding speech. As with any technology, there's obviously a business in developing AI, selling it and deploying it. But how useful it is depends on who uses it and how.

This confusion is perhaps partly driven by fact that some businesses are developing and operating 'open' AI systems-as-a-service focused on particular use-cases or scenarios (chatbots, research, text-to-image and so on), so you conduct your activity on their platform rather than your own device. The hype surrounding these platforms is intended to attract investment and users, but it seems unlikely that they will become the Alphabet (Google), Microsoft or Meta (Facebook) of tomorrow, especially as those tech giants are funding AI development themselves, to cement their own market dominance. 

Yet, while the tech giants might dominate the markets for their technology (and some markets where they act as more than just a tech business, like advertising), you'll see that they aren't dominating every business sector or industry in which their technology is used. 

It's therefore the people and businesses who successfully deploy and use AI who will benefit from those technologies, not the developers. This is no different to the use of telephones, laptop computers or email (or a distributed ledger supporting a cryptocurrency). 

Nobody who went from using a typewriter or the analog version of a telephone, laptop, email or work intranet would say that they're redundant or even work less as a result of using the new/replacement technology. If anything, those tools have enabled changes in work patterns that have meant that humans work faster, longer and, ultimately, harder.

And there was more 'retraining' involved in introducing PCs, email, spreadsheets and video conferencing than AI, which may be so embedded in existing processes that you don't even realise you're using it, whether in terms of product recommendations, chatbots and virtual assistants, predictive text and search features, or tagging your friends in the social media. 

There is plenty of speculation that truck drivers will be replaced by robots. Maybe truck technology has evolved to mean fewer drivers per tonne of truck, but there has been a steady increase in the number of trucks (and therefore demand for drivers) in the UK, for example, and driving a giant HGV takes more skill than smaller vehicles. Yet, ironically, there is a persistent shortage of drivers, so that transport firms are effectively being forced to invest in autonomous vehicles, just as farmers are turning to robotics due to a shortage of humans willing to pick fruit and vegetables). There are also many risky tasks that are better done remotely by machines, such as working in radioactive or other dangerous environments. AI may still be a threat to those still willing to do those tasks, yet they could also benefit from the demand for experienced humans to help in the wider development, deployment and use of the robots. This is no different to previous waves of technological innovation.

Yet all humans have a genuine concern if their personal information is being included in an AI's training data or is otherwise being harvested and used without your consent. That's where humans need to focus urgently, as well as in the creative industries where copyright violation by AIs is also rife. We also need to be on guard against hallucinating AIs, disinformation, deepfakes and misinformation - particularly in an election year.

More on that soon...


Tuesday 27 February 2024

Defending Humanity Against The Techno-Optimists

I've been involved in tech since the mid-90s, have experienced the rise and burst of many 'bubbles', and have been writing about SiliCon Valley's war on the human race since 2014. But the latest battles involving crypto and AI are proving to be especially dangerous. A cult of 'techno-optimism' has arisen, with a 'manifesto' asserting the dominance of their own self-interest, backed by a well-funded 'political action committee' making targeted political donations. Laws and lawsuits are pending, but humanity has to play a lot harder on defence... To chart a safe route, we must prioritize the public interest, and align technology with widely shared human values rather than the self-interest of a few tech enthusiasts, no matter how wealthy they are.

As Michael Lewis illustrated in The New New Thing, SiliCon Valley has always had its share of people eager to get rich flogging a 'minimum viable product' that leaves awkward 'externalities' for others to deal with. Twenty five years on, we are still wrestling with disinformation and other harmful content that flows from social media platforms, for example, never mind the 'dark web'.

Regardless of the potential downsides, the 'Techno-optimist manifesto' seeks to elevate and enshrine the get-rich-quick-at-others'-expense approach in a set of beliefs or 'creed' with technology as a 'god':

"Technology is the glory of human ambition and achievement, the spearhead of progress, and the realization of our potential." a16z

The techno-optimist creed commands followers to view the world only in terms of individual self-interest, to a point verging on malignant narcissism:

"We believe markets do not require people to be perfect, or even well intentioned – which is good, because, have you met people? Adam Smith: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages.” a16z

In other words, techno-optimists aren't interested in humanity, good intentions or benevolence. They are only self-interested and believe that you and everyone else is, too. It's you against them, and them against you. In this way, the techno-optimists absolve themselves of any responsibility to care about other humans, because other humans are merely self-interested and technology is the pinnacle of everyone's self-interest. 

The cult only needs to focus on building new tech. 

The only remaining question relating to other humans is whether your self-interest is aligned with the techno-optimist's chosen technology. If not, you lose - as we'll see when it comes to their use of your cryptoassets or your copyright work or personal data where it is gathered among the training data they need to develop AI systems...

You might well ask if there are any constraints at all on the techno-optimists' ambition, and I would suggest only money, tech resources and the competing demands of other techno-optimists.

They claim not to be against regulation, so long as it doesn't throttle their unrestrained ambition or 'kill' their pet technology. To safeguard their self-interest, the techno-optimists are actively funding politicians who are aligned with their self-interest and support their technology, and attacking those who are not... with a dose of nationalism for good measure:

“If a candidate supports an optimistic technology-enabled future, we are for them. If they want to choke off important technologies, we are against them,” wrote Ben Horowitz, one of [a16z's] founders, in a Dec. 14 post, adding: “Every penny we donate will go to support like-minded candidates and oppose candidates who aim to kill America’s advanced technological future.” Cointelegraph

"Fairshake, a political action committee [PAC] supported by Coinbase and a16z, has a $73 million war chest to oppose anti-crypto candidates and support those in favor of digital assets... Fairshake describes itself as supporting candidates “committed to securing the United States as the home to innovators building the next generation of the internet.” Cointelegraph

Nationalistic claims are typical of such libertarian causes (Trump's "Make America Great Again") and invite unfortunate comparisons with European politics of the 1930s, as George Orwell pointed out in his Notes on Nationalism in 1945:

Nationalism is not to be confused with patriotism... two different and even opposing ideas are involved. By ‘patriotism’ I mean devotion to a particular place and a particular way of life, which one believes to be the best in the world but has no wish to force on other peoplePatriotism is of its nature defensive, both militarily and culturally. Nationalism, on the other hand, is inseparable from the desire for power... 

A nationalist is one who thinks solely, or mainly, in terms of competitive prestige. He may be a positive or a negative nationalist — that is, he may use his mental energy either in boosting or in denigrating — but at any rate his thoughts always turn on victories, defeats, triumphs and humiliations. He sees history, especially contemporary history, as the endless rise and decline of great power units, and every event that happens seems to him a demonstration that his own side is on the upgrade and some hated rival is on the downgrade. 

But finally, it is important not to confuse nationalism with mere worship of success. The nationalist does not go on the principle of simply ganging up with the strongest side. On the contrary, having picked his side, he persuades himself that it is the strongest, and is able to stick to his belief even when the facts are overwhelmingly against him. Nationalism is power-hunger tempered by self-deception. Every nationalist is capable of the most flagrant dishonesty, but he is also — since he is conscious of serving something bigger than himself — unshakeably certain of being in the right..."

Yet in 2014, Google's CEO at the time, Eric Schmidt, 'warned' us that humans can only avoid the much vaunted Singularity - where computers out-compete humans to the point of extinction - by finding things that 'only humans can do and are really good at'. Ironically, by dedicating themselves utterly to the god of technology, the techno-optimist is actually asserting the 'self-interest' of machines! 

Of course, technology is not inherently good or bad. That depends on their human creators, deployers and users. There's a long list of problems in the techno-optimist manifesto which they claim technology itself has 'solved' but self-evidently has not, either because the technology was useless without human involvement or the problems persist.

And what of their latest creatures: crypto and AI?

While 'blockchain' or distributed ledger technology does have some decent use-cases, the one that gets the techno-optimists most excited is using crypto-tokens as either a crypto-currency or some other form of tradeable crypto-asset. They insist that the technology is so distinct that it must not be subject to existing securities laws. Yet they use the terminology of existing regulated markets to describe roles in the crypto markets that are really only corruptions of their 'real world' counterparts. Markets for cryptocurrencies and cryptoassets are riddled with examples of fraud and market manipulation that were long ago prohibited in the regulated markets. A supposedly distributed means of exchange without human intervention is actually heavily facilitated by human-directed intermediaries, some of which claim to operate like their real world equivalents that safeguard their customers' funds, while actually doing the opposite. The shining example of all these problems, and the numerous conflicts with the participating techno-optimists' self-interest, is the FTX scandal. And there are many others.

As for AI, again there are decent systems and use-cases, but the development of some AI systems relies on huge sets of 'training data' that would be prohibitively expensive to come by, were they not simply 'scraped' from the internet, regardless of copyright or privacy concerns: the technological equivalent of toxic waste. The creators of several of these 'open' AI systems defend their activity on techno-optimist grounds. Midjourney founder David Holz has admitted that his company did not receive consent for the hundreds of millions of images used to train its AI image generator, outraging photographers and artists; and OpenAI blithely explained in its submission to a UK House of Lords committee:

“Because copyright today covers virtually every sort of human expression – including blogposts, photographs, forum posts, scraps of software code, and government documents – it would be impossible to train today’s leading AI models without using copyrighted materials.”

So, there we were in 2014 being warned to be creative, but it turns out that the techno-optimists believe that your self-interest and the rights that protect your work can simply be overridden by their 'divine' self-interest. 

Needless to say, many humans are not taking this lying down (even if some of their governments and institutions are).

In January 2023, illustrators sued Midjourney Inc, DeviantArt Inc (DreamUp), and Stability A.I. Ltd (Stable Diffusion), claiming these text-to-image AI systems are “21st-century collage tools that violate the rights of millions of artists.”  A spreadsheet submitted as evidence allegedly lists thousands of artists whose images the startup's AI picture generator "can successfully mimic or imitate." 

The New York Times has sued OpenAI and Microsoft for copying and using millions of its copyright works seeking to free-ride on its investment in its journalism by using it to build 'substitutive' products without permission or payment.  

Getty Images has also filed a claim that Stability AI ‘unlawfully’ scraped millions of images from its website. 

Numerous other lawsuits are pending; and legislative measures have either been passed (as in the EU and China) or regulators have been taking action under existing law (as the Federal Trade Commission has been doing in the US). 

Meanwhile, the right wing UK government has effectively sided with the techno-optimists by leaving it to 90 regulatory authorities to try to assess the impact of AI in their sectors, and even cancelled plans for guidance on AI copyright licensing that copyright owners had requested

As the Finance Innovation Lab (of which I’m a Senior Fellow) has pointed out, the AI governance debate is dominated by those most likely to profit from more AI - and the voices of those who may be most negatively impacted are being ignored. Government needs to bring industry, researchers and civil society together, and find ways to include the perspectives of the wider public. To chart a safe route forward, it is essential that we prioritize the public interest, and align technology with societal values rather than the self-interest of the techno-optimists. 

Commercially speaking, however, there's also the point that consumers tend to reward businesses that act as 'facilitators' (who solve our problems) rather than 'institutions' (who solve their own problems at our expense). Of course, businesses can start out in one category and end up in another... The techno-optimists' commitment to their own self-interest (if recognised by consumers) should place them immediately in the second category.


Wednesday 14 February 2024

You'll See The Tories' Last Stand On The Far Right...

Britain's voters need to be on guard against extremists in this year's elections, starting tomorrow. The divisive nature of British politics since 2015 has led to the collapse of the country's public services and infrastructure across the board. And we know from bitter experience that this is fertile ground for those on both the far left and far right who prey on the most vulnerable and dissatisfied. So we need a new set of politicians who focus on providing adequate public services and infrastructure rather than stoking 'culture wars' and spouting idiotic nationalism dressed up as patriotism

Starmer seems to have won the Labour Party's ideological battles and occupies relatively centrist ground. The polls suggest we're about to find out whether he's any more effective in government than the Tories have been. But anything can happen, so it's important to be alert to the threat of a Conservative Party in its death throes...

Last week, for example, a group calling themselves the Popular Conservatives (PopCorns) held a launch event in which speakers appeared to mimic the rhetoric from Germany in the 1920s-30s in rants against the judiciary and the courts. Dangerous stuff.

Worryingly, our Defence Secretary (who generally but not always goes by the name 'Grant Shapps') also recently attacked the British military's recruitment policies on "ethnicity, diversity and inclusivity" as part of his party's so-called 'war on woke'. This was alarming enough for the respected Royal United Services Institute to warn that neo-Nazi groups are trying to insert their supporters into Britain's armed forces and police (Evening Standard 14.02.24).

Sunak would likely have you believe that he represents the 'sensible' wing of Britain's Conservative Party (among many wings), but his sole remaining policy involves demonising asylum seekers and deporting asylum seekers to Rwanda (on which he publicly accepted a £1,000 bet) and he recently attended a far right rally in Italy. Bringing back David Cameron as Foreign Secretary was also perceived by some as a sign of centrism. But you'll recall that it was Cameron who moved the Conservatives from the centrist political bloc in the European Parliament to the far right bloc, and they've remained fans of Hungary's leader and Putin fanboy, Viktor Orban to this day. Sunak was also Cameron's go-to contact when lobbying for Greensill/Gupta, so you can see they're really a couple of peas in the same pod.

If you think I'm suggesting that Putin also occupies the far right of the political spectrum, you wouldn't be far wrong. In truth, that 'spectrum' is not so much a line running infinitely left and right as a circle that brings the far right and far left together, cheek by jowl. Make no mistake, both extremes share an authoritarian vision that results in a totalitarian regime controlled by a wealthy elite. German fascists chose the name 'National Socialists' as an appeal as much to the workers and those who leaned left as to those who preferred jackboots to sandals. Putin longs to reinstate the communist USSR or perhaps an earlier empire, but his Russia is effectively controlled by oligarchs with their own private security forces

Britain's politicians may have started out spouting idiotic nationalist slogans as a means of courting marginal voters, but we've seen how this ends in tears as well as outright collapse. It's time Britain's voters sobered up and elected people who want to get on with the job of governing fairly in the national interest.



Wednesday 20 December 2023

Our Enemies Are Within. Choose To Deserve Better.

When the British Prime Minister attended a fascist rally in Rome on the weekend, he crossed a line. When he claimed in his speech at that fascist rally that "our enemies... will use migration as a weapon, deliberately driving people to our shores to try to destabilise our societies," he crossed a line. 

In the year to June 2023, the British government allowed 1,200,000 people to come to Britain, of whom 40,000 arrived on 'small boats' seeking asylum. In the previous year, the figures were 1,100,000 and 35,000 respectively. To pretend that the 3% of all immigrants who come to Britain as asylum seekers in small boats are 'deliberately driven by our enemies to destabilise British society' is a very convenient scapegoat for a Prime Minister eager to distract from the many failings in British society. It is the Prime Minister's claim that has the deliberately destabilising effect.

Asylum seekers were not responsible for Thatcher, Major, Blair, Brown, Cameron, May, Johnson, Truss or Sunak himself.

Asylum seekers were not responsible for the need to bail out our banks during the financial crisis or the crippling austerity budgets that followed. 

Asylum seekers were not responsible for Britain's disastrous decision to leave the EU Single Market and Customs Union.

Asylum seekers were not responsible for perpetrating the vast financial waste and fraud during the Covid19 pandemic.

Asylum seekers were not responsible for ministers and officials partying while everyone else obeyed their Covid restrictions.

Asylum seekers were not responsible for sexual assaults by police officers or MPs.

Asylum seekers are not responsible for the sewage in our rivers or on our beaches.

Asylum seekers are not responsible for our crumbling hospitals, schools and courts, or the potholes in our roads.

Asylum seekers are not responsible for the lack of funding for legal aid, social care, education or social housing.

Asylum seekers are not responsible for our declining incomes, higher taxes and inflation.

Asylum seekers are not responsible for our bankrupt councils or the lack of government in Northern Ireland.

We were, and we are, responsible for all those things.

We elected the people responsible for those things and we keep electing the people who are responsible for those things.

Our enemies are within.

And we have a responsibility to put those things right. A responsibility to defeat the enemies within. 

Not to blame vulnerable people in rubber dinghies for the problems that we created, that we tolerate, among the politicians and their donors and cronies.

We get the government we deserve. It's up to us to choose to deserve better.


Related Posts with Thumbnails