My first reaction on this blog to the rash of headlines about artificial intelligence was, in retrospect, a little reactionary and a little short-sighted.
I simply prefer a human experience when I conduct a transaction to an interaction with AI. Call me old-fashioned, a lot of people do. I initially saw AI as an option when shopping and perhaps a benefit when one is trying to gather and organize a large amount of information in a short period of time.
I now dread it as an inevitability, a crutch for those too ‘busy’ or lazy to engage in critical thinking, a house of mirrors for those to afraid to be original or too complacent to demand originality. And while there is obvious, tremendous, world-changing potential with this technology, I see the dangers.
That is, in a sense, my job. As an author and cultural observer, I have an obligation to my readers to give the best advice possible. I tried to do that with The Old Money Book, and all the books that followed.
I have an obligation to call out possible dangers, dangers that can affect your financial well-being and your quality of life. So let me put things in a broader, historical perspective, and then pull focus to more specific scenarios that may impact you personally.
First, a little history. The United States as a track record of letting innovation run wild, allowing entrepreneurs and investors to start a business or introduce a technology, scale quickly with massive, ‘your dreams will come true’ promotion, garner huge sales from a trusting and eager public, amass huge profits, and then, only when people start getting sick or the environment begins to suffer, does the government consider it appropriate to investigate, contemplate, and possibly regulate a popular but hazardous product or ingredient.
In my lifetime, I’ve seen this happen time and time again: teflon coatings on pots and pans, silicone breast implants, and artificial sweeteners, just to name three products that later proved hazardous to public health, you know, once they were tested. No need to mention cigarettes, leaded gasoline, asbestos, or lead-based paint.
So it’s innovation and profit first, then consequences, research, and regulation afterward. After everybody’s made a profit, denied any wrongdoing or previous knowledge of any risk, and lobbied like hell to fight regulation, then worked with senators, congressmen, and government regulators to write the regulations governing said products.
And mind you, I love me some capitalism. I just don’t like sick people and a polluted planet being the collateral damage we endure in the pursuit of profit.
How does all this relate to AI? Let me count the ways. The smartest people in the tech, social, and public policy rooms are saying, Slow down. Don’t innovate so quickly with this technology because we don’t know its capabilities, we don’t know the downside(s).
And by downside, I’m not talking lost jobs and energy-sucking data centers. I’m talking about things that we don’t know–things we can’ imagine–and things, frankly, that the smartest people in the room don’t want to think about.
Just to say this again: I told so you. I told you social media was bad, and now it’s been confirmed. It’s mental, emotional, and psychological damage is measurable and pervasive. Children and teenagers should not be allowed to use it, and adults should choose to use it sparingly. It’s become a poor substitute to real life, and it shows in our society.
After the profits have been made and the damage has been done, perhaps social media will be regulated, a little, for awhile. Probably not.
Now we have AI. And now, I’m telling you. Nobody understands it completely because of its very nature. Yet no one is being responsible enough to, yes, slow down. Profit and innovation are Silicon Valley’s mantras, and they will do whatever they have to do to fulfill those two missions, regardless of the costs to the public welfare. They do not care.
Government, on the other hand, has an obligation to protect us but has no real understanding of what AI can present in terms of catastrophic, unforeseen consequences because, as I said, nobody does. We are staring into an abyss, and the only thing we can do is…not lean too far over it trying to see just a little farther…and then fall in.
So regulation is not a realistic option, even if the federal government had the will, understanding, or the political courage, which it does not.
So what do you do? First, think about a few things.
One. I suspect that AI companies are not generating any real profits right now. My opinion is that they are colluding in a daisy-chain of self-dealing between a few giant corporate entities to prop up their balance sheets. This is considered by many Wall Street types to be an open secret. Valuations of AI companies are therefore, suspect. Watch for headlines in the next 6 to 18 months saying this.
Two. A lot of the stock market and the global economy is now riding on the ‘success’ of AI companies. Too much of the economy, in fact, is depending on AI investment to survive. That’s dangerous. One hiccup and the whole house of cards falls.
Three. There are a lot of other non-US based companies who are developing AI models. So the big bet that the US will dominate this space is optimistic at best and delusional at worst. There could be a lot of investment in AI that fizzles in terms of ROI as cheaper, better foreign options emerge.
Four. The speed at which AI innovation proceeds will wipe out too many jobs too quickly, before the economy and the labor market has a chance to adapt. With the introduction of the internet, it was gradual. Mail order companies had time to become websites. Jobs that were done in a specific location had time to morph into jobs that could be done remotely. AI is moving too fast to allow for that dynamic but manageable change. Unemployment rates and massive energy consumption will be the two known downsides to AI. The unknown, well…
Five. People with evil intent and AI networks without proper supervision will cook up some really wicked stuff to toss on the people and the planet. If we don’t take the time to assess these possibilities–and we’re not–it could be trouble. Actually, it will be trouble.
For you, I’d suggest that you behave as if your job has an expiration date. No matter what you read online or what your boss tells you. Think of another profession or job that you could do, if you had to, in order to survive. Get prepared. Be able to do that job.
We are a long way off from robots being able to weld, repair a broken sink, drive tow trucks, cook great meals, practice law, or provide quality, compassionate healthcare. So there are options.
Second, while I never give financial advice, I’d monitor and weigh my exposure to the market, especially if your retirement is dependent upon your investment portfolio. We have an unpredictable and destructive administration at present (trade wars and just plain wars) and a chief executive with well-documented history of personal bankruptcies. The concern that public officials usually have for the general well-being of the public is absent. Keep that in mind. Holding financial markets stable is a tough job, even for competent and ethical people. It may prove impossible for this bunch, and if they fail, it will be the American public who pays the price.
If you can downsize, consider doing that. If you can minimize, consider doing that. (Read my book The Rich Minimalist for guidance.)
I’m an optimist, but I am a realist. I suggest you be both, as well.
- BGT