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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 a key topic:
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 discussions 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.
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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