Название: Power and Prediction: The Disruptive Economics of Artificial Intelligence
Автор: Ajay Agrawal, Joshua Gans, Avi Goldfarb
Издательство: Harvard Business Review Press
Год: 2022
Страниц: 287
Язык: английский
Формат: pdf (true)
Размер: 10.1 MB

Disruption resulting from the proliferation of AI is coming. The authors of the bestselling Prediction Machines can help you prepare.

Artificial Intelligence (AI) has impacted many industries around the world—banking and finance, pharmaceuticals, automotive, medical technology, manufacturing, and retail. But it has only just begun its odyssey toward cheaper, better, and faster predictions that drive strategic business decisions. When prediction is taken to the max, industries transform, and with such transformation comes disruption.

What is at the root of this? In their bestselling first book, Prediction Machines , eminent economists Ajay Agrawal, Joshua Gans, and Avi Goldfarb explained the simple yet game-changing economics of AI. Now, in Power and Prediction , they go deeper, examining the most basic unit of analysis: the decision. The authors explain that the two key decision-making ingredients are prediction and judgment, and we perform both together in our minds, often without realizing it. The rise of AI is shifting prediction from humans to machines, relieving people from this cognitive load while increasing the speed and accuracy of decisions.

This sets the stage for a flourishing of new decisions and has profound implications for system-level innovation. Redesigning systems of interdependent decisions takes time—many industries are in the quiet before the storm—but when these new systems emerge, they can be disruptive on a global scale. Decision-making confers power. In industry, power confers profits; in society, power confers control. This process will have winners and losers, and the authors show how businesses can leverage opportunities, as well as protect their positions.

Google CEO Sundar Pichai said that “AI is prob ably the most impor tant thing humanity has ever worked on. I think of it as something more profound than electricity.”Google has already seen a benefit from AI. Many companies haven’t. AI pioneer Andrew Ng, who founded the Google Brain proj ect and was chief scientist at Baidu, proclaimed that “AI is the new electricity. It has the potential to transform every industry and to create huge economic value.”We agree. AI has the transformation potential of electricity, but if history is a guide, that transformation is going to be a long and bumpy ride.

The example of electricity shows that there is no inherent inconsistency between optimism about the future of AI and disappointment in the results thus far. In the first wave of electricity, light bulbs replaced candles and electric motors replaced steam engines. These were point solutions, with no restructuring required. The economy did not transform. AI is in the same situation. It is applied as a new tool for predictive analytics. A handful of companies like Verafin are seeing a benefit from enhanced prediction. This is the 11 percent of companies that are already seeing a financial benefit. They already did prediction, and AI is making their predictions better, faster, and cheaper. The lowest- hanging fruit for AI are point solutions, and that fruit is being picked.

Filled with illuminating insights, rich examples, and practical advice, Power and Prediction is the must-read guide for any business leader or policymaker on how to make the coming AI disruptions work for you rather than against you.