By: Cameron Hamilton, CFP®, MBA
- Artificial Intelligence and Machine Learning will Improve Productivity
- Tools are Publicly Available for Laypeople without Coding Knowledge
- Workers and Companies Must Adapt to New Technology
Artificial Intelligence wrote this commentary in five minutes. Not the one you’re reading, but rather the one available at the hyperlink. I thought it would be fun to experiment with AI to provide an overview of the rapidly changing field. If you have two extra minutes, I encourage you to take a look at that link and see what I produced in less than five minutes with the help of Google’s free AI platform, Bard. However, you don’t need to see the actual work product to appreciate my takeaways from the experience.
Broadly, AI uses computer science to solve problems using large sets of data. Companies have been developing tools to improve their businesses for years. Think of shopping on Amazon; the AI-powered suggestions based on their massive data from serving customers sometimes seem to know what I want before I do. AI has weighed more heavily in the financial media in recent months as companies have developed inexpensive and user-friendly language models that anyone can use. You don’t have to have coding knowledge to use Microsoft/OpenAI’s ChatGPT or Google’s Bard; you just have to be able to type a question.
It doesn’t take much digging when reading about artificial intelligence to find some alarming pontifications along the lines of, “If computers can do our jobs, what happens when we’re all out of work?” While this feels like panic related to anxiety caused by rapid change, the question is rooted in fact; the efficiency gains made possible by artificial intelligence and machine learning will make it possible for today’s workers to do more with less.
However, AI is not the first example of technology creating efficiency that changes how we work and live. We could start at stone tools and fire and move all the way to Zoom meetings to track those changes. AI is just the latest piece of technology that reinforces the trend constant throughout history: the only constant is change and change comes faster as time moves along.
While we wait to see how AI shapes work and life over the coming months and years, I want to share a profound analogy from a recent conversation. A friend who runs a software company shared that using a $20 AI tool, they solved a problem in four hours that had stopped progress on a project for weeks. Their conclusion after this experience was, “It’s like my brain on steroids.” I see this as the perfect analogy because I know that I’m not capable of winning the home run title just by taking steroids. AI is a “performance enhancer” that can maximize productivity in the right hands. Thinking through this lens, here is how three groups should be thinking about AI.
Workers
We’re accelerating our transition into a knowledge economy. Workers who get paid to use their brains- physicians, attorneys, scientists, financial planners, etc need to be aware of the value of what they produce. Glance over the AI written commentary I provided and you’ll see that summarizing information will not be valuable work for humans in the coming years. I see this as a great challenge to seek creative value. Machine learning can decrease the effort to complete repetitive tasks, and knowledge workers must spend their time learning how to utilize new tools to be more productive in high impact creative problem solving.
Companies
Just like workers, companies must adapt. Firms with the resources to develop their own tools must do so to drive efficiency, because new competitors will emerge as AI decreases barriers to entry. They’ll also have to rethink what is often their most important resource, their employees. Companies will have to make compelling offers to ultra productive workers who utilize new tools efficiently, and motivate those who don’t adapt as easily.
Investors
In times of rapid change, it is easy to imagine that the old fundamentals of investing need to be discarded. There are certainly arms races unfolding, both between firms developing AI tools and venture capitalists seeking to fund new projects, that will lead to FOMO, fear of missing out. Similar to the dot com boom, AI will create winners and losers in the financial markets. As investors we must maintain discipline and continue to underwrite growth stories against their fundamental ability to generate cash flow.
SOURCE:
Google Bard
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