Archive for May, 2015

Artificial Intelligence Post Number 1

May 30, 2015

Artificial Intelligence (AI) will be very disruptive to society, including the stock market. The degree of disruption is open for disagreement. It could range from the expansion of current applications all the way to smart and thinking computers taking control in many areas. Over the next few months, I will be discussing my take on this disruption, and how someone may gain on their investments by being prepared for the changes. I got interested in this subject because of people like Stephen Hawking warning that: “The development of full artificial intelligence could spell the end of the human race…It would take off on its own, and re-design itself at an ever increasing rate. Humans, who are limited by slow biological evolution, couldn’t compete, and would be superseded.” Elon Musk, of Tesla and SpaceX fame: “I think we should be very careful about artificial intelligence. If I had to guess at what our biggest existential threat is, it’s probably that. So we need to be very careful…” Bill Gates said that he didn’t understand why there wasn’t more concern about AI’s path. Steve Jobs of Apple fame also expressed concern. Now you may not agree with these people, but they are certainly intelligent and not known to go off the deep end on crazy ideas.

I wrote a book Artificial Intelligence Newborn – It is 2025, and I am Here! It is by necessity fiction, but I did my best to make it a viable scenario of how the growth of thinking computers could actually happen. It will be published by Kellan Publishing in several months. But for this post, I want to primarily discuss the current status of artificial intelligence and how it is going to affect our lives and our economy.

AUTOMOBILES For several years, premium cars like Mercedes and Volvo have had available driver-assists that include lane monitoring and steering correction, collision sensing that warns of cars or objects that are getting too close ahead of the car along with automatic braking, blind spot sensing and warnings, and rear cameras that include cross traffic sensing. Since these safety features were optional, these companies had the ability to compare identical vehicles with and without these features. A 2013 study by the Institute of Highway Safety looked at data for Volvo and found that for their SUVs with the safety options, there were 33% fewer bodily injury claims, 15% fewer property damage claims, and 20% fewer collision claims. Sedans had less reductions, but still significant.

David P. Carlisle used data from several studies to show that in eight years an estimated 15% of all collision repair jobs will be avoided. It will be greater if the government mandates incorporation of these devices in all new cars, like they did air bags. The reduced collision repair jobs will dramatically reduce the parts market for OEMs, reduce profits for car dealers that repair cars, and hit the various independent repair shops. These safety devices are going to be offered on many main stream cars this fall. They use a combination of cameras, radar, GPS, and very powerful computers with sophisticated software to do these very complex tasks. One may say that they are not truly AI, but they certainly are a first step given the decision making going on, pre-programmed or not!

ROBOTS Look at the new Tesla factory Sure, there are still a few people left, but you can be sure that some design engineer is looking at replacing each of them with a robot. Almost anything in an assembly line can be done by one of the newer robots. The vision, grippers, and computers give them unbelievable dexterity and versatility. Not truly thinking, but certainly approaching it. These robots will cause companies like Apple that currently makes many of its products in low cost labor countries, to bring their manufacturing back to the US. The issues and transportation costs involved with overseas sourcing will no longer be justifiable with robotic assembly.

A February USA article “More robots coming to U.S. factories” predicts that 1.2 million additional advanced robots are expected to be deployed in the U.S. by 2025. That will cause manufacturing automation to go from its current 10% to 25%. Low-skills jobs will be reduced while higher-skill positions, such as programming and maintaining robots, are expected to grow. POTENTIAL FOR INVESTORS Although US industry profits are likely to rise, unemployment of the unskilled will increase. Investing in technical colleges that emphasize computer and robotic training may be a consideration. Buying stock in advanced robotic makers may be wise. Car insurance companies will either be able to lower rates or increase profits. I think that they will increase profits, so buying their stocks may be viable. The need for emergency room doctors will decrease, as will the medicines and supplies. Used cars that do not have the newest safety features will go down in value. So any investor owning such a car may want to consider buying new before the prices of the older cars collapse.

Relationships between countries like China and the US may become problematic as we no longer need them for low cost assembly. Higher unemployment in those other countries will be a likely result. It could be coincidence, but manufacturing in China shrank for the third straight month in May. Perhaps resulting increased tension between the US and China will increase military spending in the US!

NEXT UPDATE All of the above assumes that technology stays the way it is. It just expands. In the middle of June, I will look at likely improvements, especially in computer intelligence, which are likely to make the disruptions far greater than what I list above. And then, at the beginning of July, we will look at more extreme AI outcomes, more in the order of what concerns Hawking, Musk, Gates, and Jobs.


Change of Direction

May 14, 2015

This blog is going to make a slight course change.  I am going to start monitoring what is happening with Artificial Intelligence (AI) and how it is likely to affect the economy in the coming years.  As many of you know, many smart people like Stephen Hawking, Elon Musk and Bill Gates have warned that the development of Artificial Intelligence (AI) could lead to the end of the human race.

Some could disagree with that scenario, but it certainly is obvious that AI inroads on things like self-driving cars and trucks look feasible in the coming years.  Same cars already have options that enable the car to warn you if a car is in your blind spot, warn you of cross traffic when you back up, warn you of obstacles behind your car, warn you if you are drifting out of your lane (and actually nudge you back into your lane), and slow or stop your car when you are getting too close to the car ahead of you.  And Tesla has hinted that shortly their cars will be able to pass another car automatically, and safely, if asked to.  Google has been testing self-driving cars for quite a while now.  If automatic cars/trucks come to fruition, the effect on the economy will be huge.  How many truck and taxi drivers will become unemployed?  Many people could get by with one car.  The car could take one person to work than come back for the other.

But I am intrigued by the thought that AI computers could get so smart that they could indeed take over.  Kellan Publishing is in the process of publishing my new book, Artificial Intelligence Newborn – It is 2025, and I am Here!  I will keep you up to date on when the book will be released.

I will be updating this blog monthly with the current progress of AI.