Don’t believe the hype about AI in business Posted on : Mar 17 - 2018

To borrow a punch line from Duke professor Dan Ariely, artificial intelligence is like teenage sex: “Everyone talks about it, nobody really knows how to do it, everyone thinks everyone else is doing it, so everyone claims they are doing it.” Even though AI systems can now learn a game and beat champions within hours, they are hard to apply to business applications.

M.I.T. Sloan Management Review and Boston Consulting Group surveyed 3,000 business executives and found that while 85 percent of them believed AI would provide their companies with a competitive advantage, only one in 20 had “extensively” incorporated it into their offerings or processes. The challenge is that implementing AI isn’t as easy as installing software. It requires expertise, vision, and information that isn’t easily accessible.

When you look at well known applications of AI like Google’s AlphaGo Zero, you get the impression it’s like magic: AI learned the world’s most difficult board game in just three days and beat champions. Meanwhile, Nvidia’s AI can generate photorealistic images of people who look like celebrities just by looking at pictures of real ones.

AlphaGo and Nvidia used a technology called generative adversarial networks, which pits two AI systems against each another to allow them to learn from each other. The trick was that before the networks battled each other, they received a lot of coaching. And, more importantly, their problems and outcomes were well defined.

Most business problems can’t be turned into a game, however; you have more than two players and no clear rules. The outcomes of business decisions are rarely a clear win or loss, and there are far too many variables. So it’s a lot more difficult for businesses to implement AI than it seems.

Today’s AI systems do their best to emulate the functioning of the human brain’s neural networks, but they do this in a very limited way.  They use a technique called deep learning, which adjusts the relationships of computer instructions designed to behave like neurons. To put it simply, you tell an AI exactly what you want it to learn and provide it with clearly labelled examples, and it analyzes the patterns in those data and stores them for future application. The accuracy of its patterns depends on data, so the more examples you give it, the more useful it becomes.

Herein lies a problem: An AI is only as good as the data it receives. And it is able to interpret that data only within the narrow confines of the supplied context. It doesn’t “understand” what it has analyzed, so it is unable to apply its analysis to scenarios in other contexts. And it can’t distinguish causation from correlation. AI is more like an Excel spreadsheet on steroids than a thinker. View More