How could AI affect you?
As a technology, AI has the potential to bring about significant benefits to society by automating tasks, providing insights into large amounts of data, and enabling new types of applications.
On the other hand, AI also poses some challenges and concerns. Some worry about the potential for job displacement, bias and fairness issues in algorithmic decision making, privacy and security concerns, and the potential for AI to be used in harmful ways if not properly regulated.
If this introduction sounds like something written by a journalist or think tank, guess again. It was written by ChatGPT, the Large Language Model that hit 100 million monthly active users in January 2023, making it the fastest-growing computer application in history.
In May of this year, clients and colleagues of Cumberland Private Wealth were invited to a discussion on AI – what it is, what it can do, where it’s going, and how it might affect us all. The presenters included Barbara Gray of Brady Capital Research, an expert on the impact of artificial intelligence, as well as Charlie Sims, Peter Jackson, and Levon Barker of Cumberland Private Wealth Management.
Changing the way we travel, eat and invest
Sims pointed out that most of us are already interacting with AI on a regular basis, whether through navigation in our cars, facial detection on our phones, autocorrect on our devices, or search and recommendation algorithms when we use the web.
Gray presented her view that there are three main layers at which she believes companies will use AI to unlock greater value:
The surface layer, where value is extracted by unlocking the productivity and efficiency of people and processes
The middle later, where new value is originated by making products and services better and more attractive
The deepest layer, where companies capture value by unlocking the so-called long tail – using data to deliver highly customized, niche solutions and experiences.
To highlight the power of the long tail, consider the difference between offering a hotel stay where every room is more or less the same, vs. using AI to sift through thousands of short-term rental properties to deliver the perfect vacation spot based on your unique preferences.
Gray also highlighted ways in which companies can connect their long tails of knowledge, data, content, goods and services together to create integrated consumer experiences. Imagine being able to ask for a delicious, low-calorie, Spanish-influenced meal, and an AI network being able to extract just the right recipe from one source, evaluate the nutritional data from another source, order the ingredients from yet another source, and have them delivered to your door together alongside cooking instructions.
During the Q&A portion of the discussion, the Cumberland team shared insights into the kinds of companies that they believe can benefit from advances in AI and the kinds that could be at risk of being disrupted. They also discussed regulation, ethics, and some of the ways in which Cumberland has been experimenting with AI tools in the investment research process and in automating the client experience.
From digital transformation to AI transformation
Gray expects AI to transform everything from Hollywood screenplays to medical diagnostics, music production to government agencies. Although many of the changes will be positive for companies and consumers, there remains the obvious question of how quickly workers who are displaced by the technology will be able to regain their economic footing. She believes that new jobs and modes of value creation will inevitably emerge, even if we can’t predict exactly what that will look like from our current vantage point. 9She remains optimistic overall regarding the benefits from AI.
How will AI affect you? It largely depends on where you stand. Massive transformations of this sort will produce various gains and losses, and it’s possible that many of us will experience both sides of the coin. Gray believes that the best strategy is to work on adapting rather than trying to resist or deny the changes that are already well underway. She predicts that the transformation to an AI-driven world will mirror the digital transformation of past decades – only much faster this time.
Please watch the full presentation here, and let us know if you have any questions, we would be pleased to hear from you and address them as best we can.