Is AI gonna rip us apart ?

Hey guys, just saw an article from Bloomberg about Machine Learning facilities at MS.

https://www.bloomberg.com/news/articles/2017-05-3…

Hey guys, I just saw an article from the Economist about Machine-Learning. According to the Economist, it seems that AI is already affecting BO/MO, S&T, and credit rating. Here is the link:

https://www.economist.com/news/finance-and-econom…

Below is the original post.

I personally hold an opinion that the over-worship of AI is a little dangerous, because after all this is a world of humans. We use AIs to help us instead of replacing us.

However, in college, at least my college, computer science majors increase exponentially. There are tons of my friends who want to apply/applied for deep learning/machine learning/human interaction graduate programs, all AI-related. Even a psychology major and a physics major did.

So no one thinks that this is a little crazy? Are banks adopting AIs now? How are we going to handle AI?

 

I would agree - it seems a lot more people are studying the software engineering/computer science/etc.

I think it is just going to lead to other avenues of work being opened, I don't think it would be a good idea to not develop AI for fear of it changing the industry.

'I'm jacked... JACKED TO THE TITS!!'
 

Well you're posting in the investment banking forum section, so no, I don't think it's crazy. Yeah, there's quantitative trading, big data, and more, but it's very doubtful that AI will replace the actual traders, the MD's, or the industry. Computer Science is not Finance. Although perhaps they find things in common through Data Analytics. Banks can use technology and applications to improve their work or financial services, but not one has yet to touch something like say, blockchain technology. So if it's still taking time to get self-driving cars off the ground, then I think it's doubtful that AI technology will take over an entire banking industry.

 

You could be right and my perception on technology and banking could be flawed and/or outdated. I can't say on personal experience, but I've spoken with a few FinTech CIO's a few months ago and yeah, FinTech is definitely making a mark on the structure of the banking industry. It's definitely affecting the back office, possibly the front office, but personally like I said, I still don't think it'll completely consume all the MD's and what not. Compensation in IB is down by a lot, and this compensation may be moving to other jobs somewhere else in the industry, but remaining relevant to the topic of this thread, I don't fear the great reign of AI anytime soon.

 

I agree. It seems least likely that AI would overtake IB as compared to other areas in finance, given the importance of client relations. One could imagine human speculation being completely overtaken by computers, however. The fact is that a machine learning algorithm can make better, more consistent, and faster predictions than a human operating under the same principles. However, prediction is speculation, and it is unlikely, though not impossible, that a machine will be able to find true value. That being said, I've used some of the machine learning techniques, such as neural networks, random forests, and boosted trees, and they are truly astounding. After working with them, you inevitably have that frightening thought that they could do anything.

 

Yes - S&T people would say "it's still a people business" yet head counts have gone down drastically and a lot of other trading jobs are obsolete. Therefore, I think it's more important than ever to keep skills and networks robust.

Also, there's a lot of AI and technology currently being developed for investment banking. There's a lot of fintech money in modeling; so perhaps in the future headcounts will fall.

 

i'll try to find the source for what i'm about to type, but basically there was a study done by (oxford? - again, will find and edit this) and it said the most-secure jobs from AI (if that is something that can even be quantified, looking 30 years into the future) jobs that were a) creative in nature and b) client-facing in nature fared the best in being the least replaceable.

 

I don't think it means the end of the world as we know it or for jobs, I think it'll create space for new jobs for creating the AI, for managing automation and new ideas on using AI. You could call it creative destruction, in one way old jobs are lost but news ones come in different ways.

I work for a AI company called Plum Fintech who automate savings for people, and I think its helped and created new opportunities, not less!

 

In that sense, however, wouldn't it be a fair assumption that much more jobs would be lost than would be created? In the United States, I think around 60% of the working population is involved in blue-collar labor, which AI could effectively replace in the future. If singularity theory were true, wouldn't it be feasible for AI down the road to create and manage themselves?

In Black Mirror, a theory surrounding the S1E2 is that AI has replaced almost all existing human functionality. Humans are left to indulge in entertainment and help to power the AI systems through cycling (an energy generation method being applied today).

 

Nobody can replace the adrenaline rush I get when i check my burger to see if it's under cooked or burnt Lmao. But slowly all of the minimum wage jobs are being replaced because of how simple the they are. What does this mean for restaurants now that their service costs are slowly becoming fixed(With cashiers also being replaced by robots)

 

Never really thought that way....ermagerd!!!

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."
 

Sounds like a pipe dream for at least the next 20 years. Machine learning has been big in the AI and trading industry for some time now and I'm sure it can only continue to get better.

The thing I'm not sure can ever be completely replicated is intuition. Consider a time 100 years in the future and a robot is able to move and process data like any other human, except a lot quicker and more efficient. The robot comes upon a situation where it must perform an action, it collects as much possible data about its surroundings, processes it, performs the statistical analysis of every scenario to do such task based on past situations, and then executes the action with the highest probable odds of successfully completing the task. I think humans are able to experience a "sixth sense" (intuition) at times and just know when a situation isn't the same as the past. They'll go against the odds to perform a seemingly normal task.

Once robots are able to collect enough data of real life, maybe they'll be able to get that same sensation, but I doubt it.

/End hippie trippiness

 
HFer_wannabe:

The thing I'm not sure can ever be completely replicated is intuition. Consider a time 100 years in the future and a robot is able to move and process data like any other human, except a lot quicker and more efficient. The robot comes upon a situation where it must perform an action, it collects as much possible data about its surroundings, processes it, performs the statistical analysis of every scenario to do such task based on past situations, and then executes the action with the highest probable odds of successfully completing the task. I think humans are able to experience a "sixth sense" (intuition) at times and just know when a situation isn't the same as the past. They'll go against the odds to perform a seemingly normal task.

Of course, the ability to "know" based on "intuition" that a scenario "isn't the same as the past" must be based on some apprehensible data about the situation which, putatively, the robot has not collected, violating the previous premise that the computer "collects as much data as possible".

Other than that ripple, I read this paragraph to mean "humans possess the competitive advantage of making wrong decisions ex ante". Which, I submit, is a dubious proposition.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."
 

AI will be able to do a lot of things humans do right now, but I would not be concerned about it from an overall employment perspective. The effect will be to push wages up as humans are freed from those tasks and can work on ever more productive areas.

That being said however, from an individual point of view you might be screwed if your only skills are related to a field that can get automated.

On another lightly related note, I really can't understand how people who do not study engineering can go about their lives totally ignorant of how the technology they use every day works. Must feel like living in a magical world.

Nothing personal, just business.
 

"The effect will be to push wages up as humans are freed from those tasks and can work on ever more productive areas."

This is wrong. What productive areas ? The robots are already able to reap grappes more efficiently than about 90% of people working in vineyards, the last 10% percent working in extremly qualitative vineyards that will continue to employ workers instead of robots. This is the same in the automotive industry, this will be the case in textile when robots will be cheaper than Vietnamese... With IA the same thing will happen with lawyers, bankers, traders and so many other jobs that people think are protected today. Actualy robots and IA could progressively cut the jobs of the bottom 50%(or even more ?) of any given profession. What will we do with these people ? This is the question that we have to answer.

 

//www.youtube.com/embed/JtWcBP_l3m8

At around the 34 min mark, some prominent VCs debate machine learning as one of the top tech trends. I tend to agree with Jurvetson on this but that's probably biased by the techno-optimist in me.

"Rage, rage against the dying of the light." - DT
 

TheSquale,

I stand by my comment about wages and human resources reallocation.

Humans never seem to stop trying to improve their standard of living and AI or robots are no different than any other technological advancement. When a task people used to do can be done more efficiently with capital equipment, that is great because it frees the time of the people to do something else, something perhaps no one has even thought about yet. We have seen that happening since the beginning of time and technology.

"What will we do with these people", that is the same everyone asked themselves when new farming technology was making jobs redundant in the western economies a few hundred years ago. USA is a very clear example, the economy went from having basically everyone working on agriculture to industry to services today all of that with a relatively low and constant unemployment rate. It was technological improvements together with the savings and investing needed to implement them which enabled the increase in productivity that allowed the human labour shifts. The net effect is ever increasing production and real wages.

Just because it is impossible for any individual to foresee the jobs that will appear in the future does not mean they will not come. In a free economy, future entrepreneurs will work on finding solutions to the new more refined consumer demands and new jobs will come with it.

tl;dr: No one could have predicted agriculture, the auto industry or silicon valley, but the fact is as technology improves productivity and makes jobs redundant, people find new ways to work to improve their living. The effect is more production and real wages.

People scared about "AI will take our jobs" will sound in a few years as stupid as these guys sound to us now: http://en.wikipedia.org/wiki/Luddite

Nothing personal, just business.
 
korlanok:

TheSquale,

I stand by my comment about wages and human resources reallocation.

Humans never seem to stop trying to improve their standard of living and AI or robots are no different than any other technological advancement. When a task people used to do can be done more efficiently with capital equipment, that is great because it frees the time of the people to do something else, something perhaps no one has even thought about yet. We have seen that happening since the beginning of time and technology.

"What will we do with these people", that is the same everyone asked themselves when new farming technology was making jobs redundant in the western economies a few hundred years ago. USA is a very clear example, the economy went from having basically everyone working on agriculture to industry to services today all of that with a relatively low and constant unemployment rate. It was technological improvements together with the savings and investing needed to implement them which enabled the increase in productivity that allowed the human labour shifts. The net effect is ever increasing production and real wages.

Just because it is impossible for any individual to foresee the jobs that will appear in the future does not mean they will not come. In a free economy, future entrepreneurs will work on finding solutions to the new more refined consumer demands and new jobs will come with it.

tl;dr: No one could have predicted agriculture, the auto industry or silicon valley, but the fact is as technology improves productivity and makes jobs redundant, people find new ways to work to improve their living. The effect is more production and real wages.

People scared about "AI will take our jobs" will sound in a few years as stupid as these guys sound to us now: http://en.wikipedia.org/wiki/Luddite

+1

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."
 

I get your point but no one can be sure that this will be the case. You're optimistic and I am not. The transition from agriculture to industry manufacturing resulted in an increasing number of jobs for the less qualified. With IA & robots this is different, we are basicaly suppressing the need for low skilled workers. I am sure we'll still need some workers that will work hand in hand with robots but not as many as we have today. Moreover I am based in Europe and I have somehow a different point of view about full employment and all. The problem we face is that there isn't work for everybody, even if no one want to say it out loud. And except in Germany if you look at our factories we are MUCH less automated than the USA. What will happen when managers will increasingly use robots because employees costs are too high ? I would also tone down a little the rethoric about the "full employment" situation in the USA, the labour participation rate in the USA is near 1978 level. Even if it's rebounded a little last month this is a very ugly picture and you can't honestly say that you have "low unemployment rate". Just look at this chart: http://www.zerohedge.com/sites/default/files/images/user5/imageroot/201…

 

"except it doesn't have to eat or sleep." right. or have sex. or do anything, for that matter, to survive. furthermore, there are no degrees of comfort for a robot's survival. It's on or it's off.

Any attempt to create a robot that can experience any genuine emotion at all will be a saccharine fallacy. Robots will continue to be the best and most complacent slaves humanity could ever hope for. As they become more intelligent and powerful, humans will compete to amass their ownership of these value-generating assets.

A purely rational being, not tethered to a transient, physical survival, is not a threat to humanity's quality of life.

 

This is how you know startups are in a bubble. Celebrities with no investment experience are getting in and funding wacky projects that have little chance of success in the next decade or so.

The secrecy may pertain to the CIA work or it may be that they don't have anything.

I am going to ask Reese Witherspoon to fund a time machine. We are going to go back to 1970 and sell modern PCs for $5000 apiece. We will also invent Disco and pet rocks. We will then invest $2 Billion of the proceeds in Apple Computers in 1978 (pre IPO) and generate $2 Trillion in wealth for our stockholders.

 

The automobile's invention temporarily put horse related workers out of a job. Car factory automation shifted skilled labor into service sector jobs.

Technology/innovation historically has created new industries and career paths. I'm wondering if today's innovation is inherently harmful to employment..or if it is more of the same.

Robert shiller said on a YouTube video that he is worried about the future. I'm excited to see how it turns out

 

Robert Shiller talks to Charlie Rose about inequa…:

Somewhere in the full interview he said he came back from a economic convention with "sweaty palms"

Ray Dalio recommends reading Lessons in History by William Durant which tells the reader that the wage gap widens under capitalism until some breaking point(revolts,war, wealth redistribution)

AI may expedite this process

 

Bob Shiller's a smart guy. To the point where I can't put an upper bound on how smart he is. There are things he can understand and connections he can form that I can't. And as a quant who worked on the trading floor of a major bank for several years, I'd like to think I'm a pretty smart guy.

I haven't seen the video, but my concern has always been that capitalism is always trying to squeeze more efficiency out of labor and is always trying to replace labor with capital. And over the past 15 years, capitalism has been doing an amazing job at it- perhaps too good of a job. And a lot of smart liberal leaning economists have raised a lot concern about that. Actually, Schumpeter, more of a conservative economist, raised it 70 years ago in Capitalism, Socialism, and Democracy ("Can Capitalism Survive?")

 

Might have to look into changing my belief structure to socialism...

"You stop being an asshole when it sucks to be you." -IlliniProgrammer "Your grammar made me wish I'd been aborted." -happypantsmcgee
 

Not likely in our prime working life. The complexities that arise from a plethora of human insanity induced problems will make developing an AI that can rationalize out problems created by humans incredibly difficult. Think about all of the cultural differences that exist in the US alone. Now task a geek with creating a program that sufficient self correct-ability for international cultural differences. The size and complexity this would take decades if not a couple hundred years for the programming ability to meet the real world demands.

On the other hand we can conceivably develop a AI that can scan financial documents for important information and present it for a human to correlate and interpret.

Follow the shit your fellow monkeys say @shitWSOsays Life is hard, it's even harder when you're stupid - John Wayne
 
deadbeat:

@IlliniProgrammer
Are these advances in artificial intelligence the first steps towards a socialist dictatorship administered by a supercomputer? Your time frame was 100 years IIRC.

I have no idea. I'm not worried because I won't care very much one way or the other. I don't plan on becoming a billionaire, and I don't plan on having to work for a living in 30 years, so it's not my problem. As long as the socialist dictatorship lets me keep my 60 acre farm on Lake Michigan and '66 Ford Mustang GT Convertible (Red) it really doesn't matter to me.
 
Best Response
deadbeat:

@NorthSider What do you make of all this?

It is, perhaps, worth noting that I have consistently argued that people are underestimating, not overestimating the technical capabilities and functions that may be performed by computers in the near future. Many, restricted by their compartmentalization of computers as "strictly rational" and human actors as "capable of creativity", are unable to conceive of worlds where computers may perform what they arbitrarily classify as "human faculties". I do not share these reservations.

That said, it is yet another error of cognition to conceive of wealth as measured by "the number of jobs" or "level of employment". Wealth is measured by the abundance of resources, not the number of jobs. The two are, of course, correlated concepts in a loose sense; however, the reason why we are wealthier today than we were 100 years ago is not because we have "more labor" today, instead it is because we have astronomically greater productivity that has produced a commensurate decrease in the cost of goods. Today a half-second of labor on the average wage suffices to purchase an hour of reading light with CF bulbs; in 1800, with candles, that same hour cost six hours of labor.

It is no accident that the modern citizen works far less, yet consumes far more than his self-sufficient counterpart from the days of yore. If computers should substitute human labor in a particular trade, it is rightfully understood as an increase in the abundance of goods and thus an increase in wealth, not an ominous sign of obsolescence.

"For all the tribulations in our lives, for all the troubles that remain in the world, the decline of violence is an accomplishment we can savor, and an impetus to cherish the forces of civilization and enlightenment that made it possible."
 

idk, having studied some machine learning and artificial intelligence (not an expert by any means) i am somewhat skeptical. i do think a lot of jobs can be replaced (doctor diagnostics, lawyers scanning documents)

however it's hard for me to imagine how a computer could create new mathematics or physics or come up with interesting ideas in finance.

everything i've read about machine learning seems to just be throwing in tons of data into an algorithm with the algorithm making updates to parameters based on some loss function to be optimized, seems way too constrained to do everything imo.

 

I created a thread a while ago regarding something about a company finding a way how to take out analysts from the equation and from what it seems people were optimistic that it will take a while before machines will be able to do that.

 

We're still decades away from general AI (the holy grail), and current applications of "artificial intelligence", even the impressive outcomes obtainable now with deep learning and neural networks, are only applicable in extremely niche situations (like playing board games or driving). Current commercialized applications of AI (machine learning) are mostly just sophisticated optimization algorithms trained with massive sets of data.

That doesn't mean that one day we won't get there. But if we start hamstringing our AI scientists now with useless and burdensome regulations, they'll just move away to innovate in a place with pretty much no regulatory oversight in tech and tons of capital (China) and we'll lose our technological edge.

There will be a day when regulation of general AI is necessary. But that day is years and years down the road.

 

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