Artificial Intelligence (Book summary)

  1. Systems predicated on this technique can learn and improve over time producing significantly more-accurate predictions than other approaches under certain conditions
  2. The enhanced prediction accuracy of these systems can help perform tasks such as translation and navigation
  1. Known knowns: Availability of rich data making more accurate predictions
  2. Known unknowns: Too little data and predictions become difficult
  3. Unknown unknowns: There are events that are not captured by past experiences but are nonetheless possible, hence prediction becomes difficult although it may not be easy to realize
  4. Unknown knowns: An association that appears to be strong in the past is the result of some unknown or unobserved factor that changes over time and makes predictions we thought we could make unreliable
  1. AI tools may augment jobs, as in the example of spreadsheets and bookkeepers
  2. AI tools may contract jobs, as in fulfillment centers
  3. AI tools may lead to the reconstitution of jobs , with some tasks added and others taken away, as with radiologists
  4. AI tools may shift the emphasis on the specific skills required for a particular job, as with school bus drivers
  1. There is a core trade-off in the business model (e.g shop-then-ship versus ship-then-shop)
  2. The trade-off is influenced by uncertainty (e.g higher sales from ship-then-shop are outweighed by higher costs from returned items due to uncertainty about what customers will buy)
  3. An AI tool that reduces uncertainty tips the scales of the trade-off so that optimal strategy changes from one side of the trade to the other (e.g AI that reduces uncertainty by predicting what a customer will buy tips the scale such that the returns from a ship-then-shop model outweigh those from the traditional model)

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