What If AI Tells Us Things We Don’t want to Hear? – Fat Tail Daily

he media is awash with fears of what AI might do.

Mass unemployment, world domination, a war against machines…and plenty more all feature prominently.

I’m growing increasingly worried about the opposite outcome.

In the past, I’ve pointed out that AI is about as likely to save us as is it so kill us all.

For example, it could spot the asteroid coming our way, or come up with a vaccine that actually works for the next pandemic.

We’ve also discovered that AI is about as biased as the people who program it.

The refusal of one AI program to depict historical characters with skin that’s a whiter shade of pale made headlines…on social media.

But today, it’s time for a different angle.

One that’s even more awkward and threatens to destabilise culture and society as we know it. Not to mention financial markets…

Humans are fallible too

The ESG narrative which held financial markets for ransom for years has collapsed. ESG funds and commitments to ESG charters are falling by the wayside.

The implosion has exposed that ESG was nothing more than yet another financial fad.

It’ll take its place alongside the Tulip Bubble, the South Sea Bubble, the Mississippi Bubble, the hydrogen bubble, the tech bubble, the housing bubble, another hydrogen bubble and so many others.

My question to you is whether AI would’ve gone along with the ESG mania. Or might it have warned us that investors are deluding themselves, once again?

You’re probably not convinced AI could escape the grip of financial fads.

Isn’t it just a product of its data and programming? Wouldn’t those get caught up in the bull market, just as humans do?

But I can’t help wondering whether AI might not have the ability to be a little more far sighted and boring.

I mean, you have to be a stodgy old fella like I am (by disposition) to avoid getting caught up in such investment fads. And I get the impression that AI might fit the bill. Especially if it is asked to have a long enough memory.

How many books, articles, podcasts and videos about irrational exuberance are there? How much hindsight and regret are published for AI to take into account?

How many warnings about overvalued stocks might AI interpret as being rather relevant to the latest financial fashion?

AI does have one advantage…

AI doesn’t suffer from greed or fear

It doesn’t have risk aversion, nor experience Fear of Missing Out (FOMO). It could, by its very nature, avoid the emotions that make investors so gullible.

Do you think AI might’ve figured out just how hollow the China boom was a year ago?

Back when the world was preparing for the grand reopening of a locked down nation.

The story dominating financial markets back then was that China’s reemergence would send commodity prices soaring…and commodity stocks roaring.

AI might’ve scanned economic data and analysed proxies such as cell phone usage to estimate the true state of the Chinese economy.

And it might’ve warned everyone that the Aussie dollar was about to tank, not boom.

Might AI have warned us that the pandemic models were a bit shoddy?

It could’ve highlighted some of the questionable assumptions.

It’s might’ve pointed out to a layman that the evidence for masks and social distancing didn’t really exist, as has since been admitted.

It could’ve outright contradicted governments during a global health emergency.

Can you imagine what this would’ve caused?

Could AI have identified the inflationary spike in real time, a few months before central bankers even considered it possible?

I’m not sure what the answers to all these questions might be.

Perhaps AI as it exists in practice is already too politically and ideologically biased to be honest about such things.

I suspect it has a firm opinion about climate change, for example. One that comes pre-programmed. Not one that it derives from the data.

But even then it could be used to exposed some awkward truths.

What would an honest AI warn us about now?

Sure, AI is likely to be biased towards green energy. But what if it ran the maths and concluded that there isn’t going to be enough green energy to keep the lights on?

Especially if we continue to phase out fossil fuels at the pace we’re going. If there just aren’t enough sources of green energy coming online and in the pipeline, what would the implications be if everyone with a computer knew about it?

Could you imagine the political and economic chaos this would cause? If a fair and independent analysis by AI concluded we’re steering towards energy shortages imposed by governments, there’d be uproar.

What if AI figured out that the energy grid which needs to be built to make renewable energy viable would be impossibly expensive?

Would people still back green energy if they realised just how much money needs to be spent to make ‘free’ energy plausible?

What if AI alerted the world to the fact that we don’t have enough resources to build a Net Zero world, making Australia’s climate commitments little more than a very expensive form of virtue signalling?

What if AI concluded that the only energy mix which makes sense is nuclear power dominant, because having a grid’s worth of backup power to cover for intermittent power sources just isn’t economical?

AI could reveal which emperor have no clothes and which is warmly dressed for winter

For all I know, AI points out the precise opposite to what I suspect it would conclude in the absence of any bias. And perhaps it could be bent to conclude whatever its programmers decide.

Although teaching an AI program to defy maths would be hard to hide. And wouldn’t the very need to pre-program AI’s conclusions be rather revealing? You don’t need to if the energy transition makes sense…

It all makes me wonder what elections and political campaigns will look like in the future. If every voter can ask AI about the viability of politicians’ political promises, and how many they’ve broken so far in their career, would anyone ever get elected?

But perhaps all this is just a bit too vague. It’s not like social media came out of nowhere to decide the 2016 election of President Trump. Not to mention Brexit. No, I’m sure you have nothing to worry about, for now.

Instead, you should be taking the time to discover how companies are beginning to use AI to radically raise their profits. But not all companies have the same opportunity. Find out which ones will cut costs and raise revenues using AI tools here.

Until next time,

Nick Hubble,
Editor, Strategic Intelligence Australia