Thoughts about the markets, automated trading algorithms, artificial intelligence, and lots of other stuff

  • A Few Graphs On The State Of AI

    Every year, Stanford puts out an AI Index with a massive amount of data attempting to sum up the current state of AI. 

    It's 190 pages that detail where research is going and covers current specs, ethics, policy, and more. 

    It is super nerdy … yet, it's probably worth a skim. 

    Here are a few things that caught my eye and might help set some high-level context for you. 

    Investments In AI 

    A-bar-chart-of-global-corporate-investment-in-ai-by-investment-activity-2013-2021

     

    via AI Index 2022

    In 2021, private investments in AI totaled over $93 billion – which was double the investments made in 2020. However, fewer companies received investments. The number of companies receiving funding dropped from 1051 in 2019 to 746 in 2021.

    At extremes, putting greater resources in fewer hands increases the danger of monopolies.  But we are early in the game, and it is safe to interpret this consolidation as separating the wheat from the chaff. As these companies become more mature, you're seeing a drop-off similar to when the web began its exponential growth. 

    With investment increasing, and the number of companies consolidating, you can expect to see massive improvements in the state of AI over the next few years.

    We knew that already – but following the money is a great way to identify a trend. 

    Increased regulation is another trend you should expect as AI matures and proliferates.

    Ethical AI 

    A-chart-showing-number-of-ai-related-bills-passed-into-law-in-25-select-countries-2016-2021 A-chart-showing-number-of-ai-related-policy-papers-by-u-s-based-organizations-by-topic-2021

    via AI Index 2022

    Research on the ethics of AI is becoming much more widespread – while the research influences papers, it is also a catalyst for new laws.

    AI's academic and philosophical implications are being taken much more seriously across the board. Many people recognize that AI has the potential to impact the world in unprecedented ways.  As a result, its promise and peril are under constant scrutiny.

    The adoption of AI might seem slow … but like electricity (or the internet), it only seems slow until it's suddenly ubiquitous.

    As you find AI in more domains, the ethics of its use becomes a more pressing concern. There is a lot of potential for abuse of technologies like facial recognition and deepfakes.  Likewise, people worry about mistakes, judgment, and who's liable for errors in technologies like self-driving cars.

    Luckily, you have many of the world's greatest minds working on the subject – including the Hastings Center.  

    Many factors contribute to the speed of AI's maturation and adoption.  Here are three of the obvious reasons. First, hardware and software are getting better.  Second, we have access to more and better data than ever before.  And third, more people are actively seeking to leverage these capabilities for their benefit.

    Technical ImprovementsScreen Shot 2022-03-31 at 2.01.17 PM

    via AI Index 2022

    Top-performing hardware systems can reach baseline levels of performance in task categories like recommendation, light-weight objection detection, image classification, and language processing in under a minute.

    Not only that, but the cost to train systems is also decreasing. By one measure, training costs for image classification systems have dropped by a factor of 223 since 2017. 

    When people think of advancements in AI, they often think of the humanization of technology. While that may eventually happen, most of the progress in AI comes from more practical improvements and applications. Think of these as discrete capabilities (like individual Lego blocks) that help you do something better than before.  These capabilities are easily stacked to create prototypes that do more.  Prototypes mature into products when the capabilities are robust and reliable enough to allow new users to achieve desired results.  The next stage happens when the capabilities mature to the point that people use them as the foundation or platform to do a whole new class of things.

    We're past the trough of disillusionment and are on the slope to enlightenment.

    Practical use cases abound.  Meaning, these technologies aren't only for giant companies anymore.

    AI is ready for you to use.

    If I think of a seasonal metaphor, it is "springtime" for AI (a time of rapid growth).  But not for you unless you plant the seeds, water them, and start to build your capabilities to understand and use what sprouts.

    As a reminder, it isn't really about the AI … it is about understanding the results you want, the competitive advantages you need, and the data you're feeding it (or getting from it) so that you know whether something is working.

    You've probably heard the phrase "garbage-in-garbage-out."  This is especially true with AI. Top results across technical benchmarks have increasingly relied on extra training data for combinatorial and dimensional reasons. Another reason this is important is to compound insights to continue learning and growing.  As of 2021, 9 state-of-the-art AI systems out of the 10 benchmarks in this report are trained with extra data. 

    To read more of my thoughts about these topics, you can check out this article on data and this article on alternative datasets. 

    Conclusion

    Artificial Intelligence capabilities are becoming much more robust and more able to transfer their learnings to new domains. They're taking in broader data sets and producing better results (while taking less investment to do so). 

    It isn't a question of "If" … it is a question of "when." 

    AI is exciting and inevitable!

    Let me know if you have questions or comments.

  • Spring and Rebirth

    For Jews, Friday was the first night of Passover, a family-centric holiday that recounts the biblical story of the Exodus of the ancient Israelites from Egypt into the Promised Land. For me, it's a reminder to appreciate what we have – and how we stand on the shoulders of those who came before us. 

    6a00e5502e47b288330263e999fff2200b-600wi

    For Christians, today is Easter – the holiday honoring Jesus's resurrection. 

    The overlap can be seen in DaVinci's Last Supper, a Passover Seder, and Jesus's last meal before his Crucifixion.  

    6a00e5502e47b288330240a454f862200c-600wi

    For Jews, a notable part of the ritual dinner is recounting each of the ten plagues inflicted upon Biblical Egypt and saying, "Never again."

    Last year, I joked that maybe COVID-19 should be added to the list. 

    And, just like the Jews making it through slavery, the plagues, and 40 years wandering through the wilderness and desert before entering the Promised Land … We are finally approaching the promise of life post-COVID.

    Of course, other global events remind us that while the world and our capabilities continue to improve and expand … human nature stays maddeningly the same.

    With the coming of spring, the return to normalcy, and the reminders from the stories of Exodus and Easter - it's a great time to do a mental and physical "spring cleaning". Mine your experiences for the things you want to keep doing (or continue not doing) as things go back to "normal".  

    Hope you celebrated with family, food, and a reverence for all the blessings around you. 

  • Here Are Some Links For Your Weekly Reading – April 17th, 2022

    HeHasRisen

    Here are some of the posts that caught my eye. Hope you find something interesting.

    Lighter Links:

     

    Trading Links:

  • Global Happiness Levels in 2022

    Happiness is a complex concept comprised of conditions that highlight positive emotions over negative ones – bolstered by the support of comfort, freedom, wealth, and other things people aspire to experience. 

    Regardless of how hard it is to describe (let alone quantify) … humans strive for happiness.

    Likewise, it is hard to imagine a well-balanced and objective "Happiness Report" because so much of the data required to compile it seems subjective and requires self-reporting. 

    Nonetheless, the World Happiness Report takes an annual look at quantifiable factors (like health, wealth, GDP, and life expectancy) and more intangible factors (like social support, generosity, emotions, and perceptions of local government and businesses).  Click the image below to view the Report.

    OC_GlobalHappiness_Main-1via visualcapitalist

    In their 2021 report, there was a significant focus on the effect of COVID-19 on happiness levels and mental health. Much of that continued into the 2022 report. 

    As you might expect, the pandemic caused a significant increase in negative emotions reported. Specifically, there were substantial increases in reports of worry and sadness across the ninety-five countries surveyed.  The decline in mental health was higher in groups prone to disenfranchisement or other particular challenges – e.g., women, young people, and poorer people. 

    It is remarkable how resilient and stable the scores have been globally considering the amount of uncertainty, stress, and disruption households experienced this past year.

    Ultimately, humans persevered in the face of economic insecurity, anxiety, and challenges to mental and physical health. 

    This year, the average score improved slightly compared to 2021 – though worry and stress have continued to rise. 

    There has been a decrease in overall happiness compared to pre-pandemic scores.  Yet, the relative balance demonstrated in the face of such adversity may point towards the existence of a hedonic treadmill – or a set-point of happiness.

    Regardless of the circumstances, people can focus on what they choose, define what it means to them, and choose their actions.

    I'm still surprised by what people can get used to … and how some people find pockets of joy in even the hardest of times.  Conversely, other people use the same ability to feel profound unhappiness, even when they have seemingly everything. 

    It's an oddly beautiful reminder that happiness comes from within.

    Another bright spot, worth mentioning, has been the massive global upsurge in benevolence. People are supporting others, communities have stepped up, more money is being donated to charity, and more people are volunteering. 

    Onwards!

  • Will Robots Take Your Job?

    The fear of a robot-dominated future is mounting … But, is there a basis for that fear?

    It's a common trope in film, but as we all know, media is meant to capture attention – not emulate reality. 

    Michael Osborne and Carl Frey, from Oxford University, calculated how susceptible various jobs are to automation. They based their results on nine key skills:

    • social perceptiveness
    • negotiation
    • persuasion
    • assisting and caring for others
    • originality
    • fine arts
    • finger dexterity
    • manual dexterity
    • and the need to work in a cramped area

    6a00e5502e47b288330240a4b2c074200d-600wi

    via Michael Osborne & Carl Frey (Click For A Comprehensive Infographic)

    There are various statistics about the rate of change for robots taking jobs. Many expect that ~50% of current jobs will be automated by 2035.  Turns out, that statistic is from Michael and Carl, and the numbers were 47% by 20341. 

    Realize that statistic actually refers to the risk of them being automated. That number doesn't take into account the realities of cost, regulation, politics, social pressure, preference, or the actual work and progress necessary to automate something – so it's unlikely the full 47% will be realized. 

     

    6a00e5502e47b288330240a4b2c15f200d-600wi

    via The Economist

    Nonetheless, many use that quote to point toward a dystopian future of joblessness and an increasing lack of middle-class mobility.  

    Mr. Frey isn't a proponent of that belief … and neither am I.  

    Automation and innovation free us to focus on what matters most (or what can create the most value). The goal is not to have machines let us be fat, dumb, and lazy … it is to free us to focus on bigger and better things.

    Industrialization created short-term strife – but vastly increased the economic pie over the long term. So did electricity or the internet. It's likely that future automation will have similar effects, but it's possible to minimize the pain and potential negative impacts if we learn from previous iterations of this cycle. The fact that we're so far along technologically in comparison to previous revolutions means we're in a better position to proactively handle the transition periods.

    New tech comes with both “promise” and “peril”. We must manage the short-term consequences of the new tech – because it is inevitable. With that said, by embracing innovation, we can make sure it is a boon to the middle-class (and all of society) and not the bane of their existence.

    Throughout history, technology has always created more jobs than it has destroyed.

    Progress means the restructuring of society’s norms … not the destruction of society.

    When we first started using technology, that progress allowed humans to stop acting like robots (think farming and manufacturing). As technology improved, we have "robots" that seem to act more like humans. They can play chess, or shoot a basketball, etc.

    The truth is that humans didn’t act like robots. They did what they had to to survive. As technology improved, we look back and have trouble imagining a time when humans had to do those things. Technology often focuses on the most pressing “constraint” or “pain." It isn’t getting more human, it is simply more capable … which frees us to ascend as well.
    There are many aspects of humanity that robots can't yet replace. But as we move forward, technology will continue to free us to be more human (which I assume means to be more creative, more caring, more empathetic, and more original).

    Doom and gloom sell. It's much easier to convince people something's going to be painful than amazing (because we're creatures of habit, and our monkey brains fear pain much more than they enjoy pleasure).

    Our attitudes and actions play a pivotal role in how the world impacts us.

    We are positioned not only to survive the revolution but to take advantage of it.

    AI is a gold rush, but you don't have to be a miner to strike it rich. You can provide the picks and shovels, the amenities, or a map that helps people find treasures.

    Onwards!

    _________________

    [1] Frey, Carl & Osborne, Michael. (2013). The Future of Employment: How Susceptible Are Jobs to Computerisation?

  • Here Are Some Links For Your Weekly Reading – April 10th, 2022

    261871

    Here are some of the posts that caught my eye. Hope you find something interesting.

    Lighter Links:

     

    Trading Links:

  • How Many Humans Have Lived?

    Despite news of declining birth rates, the world’s population continues to grow because of advances in science, technology, and medicine.

    We're nearing a global population of eight billion people. 

    There have never been as many people alive as there are now.  But have you ever wondered how many humans have lived on this planet, in total, over the long arc of history?

     

    How-many-humans-have-ever-lived-1via visualcapitalist

    The number takes a lot of estimation, but you end up with approximately 109 billion people over the course of human existence. 

    That means almost 7% of all humans who have ever existed are alive today.  It also means that for every person alive, nearly 14 people are dead.  That number seems small to me as I think about how many generations came before us.

    While this might be somewhat interesting, the more important question is what you will do with the time left in your hourglass?  To learn more about what I think about that, here's an article I wrote on the time value of time and here's an article I wrote on the power of purpose and how healthy mindsets extend your life. 

  • Batteries Not Included

    Mercedes-Benz might have a sense of humor.

    They lent Saturday Night Live a C-Class for a parody TV commercial that makes fun of battery-powered cars.

    The 2-minute video, starring Julia Louis-Dreyfus, shows a car that runs on AA batteries (which is why the car is called the Mercedes AA Class). 

    Here is the video.

    Screen Shot 2022-04-03 at 5.29.44 PM

    via SNL

    One of the highlighted features, the "Auto-Dump," helps you discharge worn-out batteries … all 9,648 of them.

    The video ends with the disclaimer: "Batteries not included."

    I hope you had a fun April Fool's Day.

  • Here Are Some Links For Your Weekly Reading – April 3rd, 2022

    261533

    Here are some of the posts that caught my eye. Hope you find something interesting.

    Lighter Links:

     

    Trading Links:

  • Top 20 Internet Giants

    For most of my life, I've been a tech early adopter. 

    Here are some snippets from that journey. I fell in love with the Mac 128 in the 1980s. My frustration with the limitations of floppies caused me to fly across the country to get one of the earliest 20 MB hard drives (which I didn't know how I would ever fill up). Much to the consternation of those who thought only secretaries should be seen typing, I was one of the first lawyers to use a computer to do work. I waited in lines to grab Palm Pilots and cool phones before smartphones became a thing. And, somehow, I don't enjoy setting up my computer anymore (OK, I do – but not like I did before). 

    A lot has changed, while much stays the same.

    In the late 90s, I was obsessed with the early web scene. I spoke at computer events like Comdex and MacWorld, and I was able to see and identify many of the companies that would become major players. Many of those "major players" expanded into the dot-com bubble, then disappeared.

    I've watched that cycle play itself out several times as the landscape and players changed and evolved.

    There is a chart that captures a lot of those changes by listing the 20 Internet Giants that ruled the web since 1998. 

    Take a look. 

    The-20-Internet-Giants-That-Rule-the-Webvia visualcapitalist

    Humans are very good at recognizing major turning points. However, with that said, they often are much worse than they would believe in regards to understanding the implications of the changes they so easily predicted.

    Who would have guessed that AOL would become almost wholly irrelevant? Or that Yahoo would make so many horrible decisions and still last to 2022?

    In the early days of the internet, most of the leaders were aggregators and search engines. Now we have a much broader set of influencers. The top 20 players in the space are also playing much larger games than their 1998 predecessors. Most of the leaders are platforms that help other products succeed as well. 

    I'm curious to see what names are added to the list in 5 years. 

    Who do you believe we will see there in 2027?