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3 Artificial Intelligence Myths Debunked

Data Science and AI

By FactSet Insight  |  August 23, 2023

AI and its subsets such as generative AI, Machine Learning, and Large Language Models have been around for years, but the ChatGPT model OpenAI launched in November really made the technology accessible to the public and captured everyone’s attention. Amid the excitement and potential for business transformation, misunderstandings have popped up.

To clarify fact from fiction, we sat down with FactSet’s Lucy Tancredi, Head of Strategic Technology Initiatives, and Ruggero Scorcioni, Director of Machine Learning Engineering and Cognitive Computing, to discuss three key topics. Here is a summary of the conversation, edited for clarity and brevity.  

What’s behind the view in some pockets that artificial intelligence can make predictions? Can AI predict the future?

When people say “prediction” in everyday conversations, they are usually referring to guessing something in the future. Such as predicting the possibility of an economic recession or a jump or drop in stock prices. In discussion about artificial intelligence, it’s important to highlight that the word prediction has a different connotation than the regular human word.

For example, consider Machine Learning, a subset of AI. In simple terms, Machine Learning helps computers learn from experience and make decisions based on that learning. Here, prediction doesn’t always imply a future guess. Let’s say you train an ML model to look at pictures of animals and identify which ones are cats. Then you give it a new animal picture. In the AI framework, we say the ML model “predicts” whether that picture is of a cat or not. It has nothing to do with predicting future events.

That said, it is possible to create ML models to predict future events, like we’ve done with FactSet predictive Signals. This AI model intelligently surfaces insights and context known as signals, such as if a company is the target of an activism campaign, is predicted to issue a follow-on, or has experienced recent credit rating changes, as just a few general examples.

There seems to be some assumptions that AI is all-knowing and smarter than humans. Is AI really that powerful?

In simple terms, no. As an example, let’s take a look at an AI subset, generative AI, where computer engineers use large datasets to train the models to learn patterns and structures. The models then use their learned knowledge to combine or modify the data and generate statistically likely text from its training data—not verified answers extracted from reliable sources. Sometimes, that results in hallucinations, which are fabricated or misleading outputs.

Although there are impressive computations behind AI—which can generate impressive results—the technology is not infallible. AI is not the equivalent of thousands of human experts with deep knowledge in many fields.

Nevertheless, generative AI models such as ChatGPT are great at helping knowledgeable humans brainstorm ideas and refine their work output. It can also be a good starting point to begin learning about topics that are new to you.

Keep in mind that without a baseline understanding of what you’re researching, you have no ability to recognize whether you are being taught with accurate information or are being (unintentionally) led astray with incorrect data. A workaround is to compare what you’re provided against a trusted resource.

AI technologies have real potential to increase our productivity. Does that mean workforces will shrink?

The expectation is that AI technologies will enable people to be more productive. If you are more productive, there will be aspects of your job you no longer have to do. That frees up time to take on work that requires human ingenuity, creativity, and knowledge—in total, that could help us produce more as a society. The bottom line is that AI technologies can aid us in our work, not make us obsolete.

Will workforces shrink? No, according to estimates in the World Economic Forum’s 2023 Future of Jobs report. Among surveyed companies looking ahead the next five years, the “impact of most technologies on jobs is expected to be a net positive.” Here are key highlights:

  • 75% seek to adopt AI and cloud computing

  • 36.4% expect uptake of “new and frontier technologies” to be a net job creator

  • 25.6% expect artificial intelligence to be a job creator

It could also be argued that AI may help level the playing field and help generate more economic benefits for companies and communities. As communication is key to commerce, AI can:

  • Enable cross-language communication among global workforces

  • Help native-language speakers communicate more effectively and efficiently

  • Help individuals navigate communications after migrating to new home country

  • Remove barriers to communication from physiological constraints and limitations that affect the ability to speak and write (e.g., aging-related limitations, hearing/speech/visual impairments, cognitive damage)

This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.

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The information contained in this article is not investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.