| This is Bloomberg Opinion Today, a Luddite uprising against Bloomberg Opinion's opinions. On Sundays, we look at the major themes of the week past and how they will define the week ahead. Sign up for the daily newsletter here. So, what's your favorite AI nightmare? Not in real life — we aren't there yet — but on the big screen? Most peoples' knee-jerk answer of course is Dave's incompetent doorman: Equally obvious if more forgettable is A.I. Artificial Intelligence, a hot mess begun by Stanley Kubrick (creator of HAL 9000, pictured above) and completed out of misguided loyalty by Steven Spielberg. Others may cite Tron, both the awesomely cheesy Gen X one and Gen Z's lame reboot, to the extent that there is a sketchy blockchain platform that stole the name. The Westworld reboot is better, even if it doesn't quite measure up to Michael Crichton's 1973 original (Disclosure: My wife has a thing for Yul Brynner.) And as my loyal readers know, I would gladly spend the rest of my short life trapped in a glass box for just one brief chat with her: We could go on forever, from the hopelessly kitschy (Logan's Run, The Stepford Wives, Silent Running) to the cleverly dystopian (Alphaville, Blade Runner, Alien) to the tiresome action-hero franchises (The Terminator, The Matrix, Resident Evil). But for my money, the best film AI portrayal is the oldest one: What makes Fritz Lang's Metropolis (1927) astonishing isn't just that it's a century ahead of its time or that it somehow manages to make the Uniting of the Workers of the World entertaining, but that it involves a clever AI double game. The plot revolves around Maria, a sort of Joan of Arc of the proletariat, and her evil doppelganger, a robotic Maria created by greedy industrialists to control the means of production. But, natch, this Maschinenmensch isn't going to obey its masters any better than Hal 9000, and sets out to destroy the masses, the bosses and the Metropolis itself. My own double game here is to make this tour of cinematic sentience relevant to my Bloombergian audience. So let's start where we usually do, with economics. Will AI be a Saintly Maria bringing efficiency and prosperity to all? Or a Robot Maria bent on burning the economy down — not through frenzied Luddism, but through an even more insidious instrument: the Fed. "As improvements in artificial intelligence continue apace, so do questions about how AI will influence economies, asset prices and — the question of the moment — interest rates: Is AI more likely to make them go up or down?" asks Tyler Cowen. "I have a bold prediction: Real inflation-adjusted rates will go up, and for a considerable period of time." How considerable? "At least for several decades, until AI-driven progress creates more wealth to replenish stocks of savings, lowering real rates once again." This differs greatly from his outlook in January that Saintly Maria would prevail, with AI becoming the biggest and best thing since Gutenberg: Over the past year and a half, I have argued that AI will improve education, boost productivity, enrich the internet, make markets more stable and land more valuable, accelerate the pace of scientific progress and increase social trust … I'm a big fan of the printing press. Nonetheless, I recognize that our ancestors could have managed its consequences far, far better than they did. The rise of AI gives us another chance to get it right. How we respond to any new technology is just as important as what any new technology does. If that makes me sound like an optimist, well — guilty as charged.
It seems like most Americans would find him guilty of over-optimism, anyway. Put more graphically: And while all humanity benefited immeasurably from the printing press, Tyler wrote last week, perhaps the best we can expect from AI short-term is "a boom in the moving-van sector." One doubts Saintly Maria led her children's crusade on behalf of Two Men and a Truck. AI may bring change to another transportation sector as well. Consider this question from Jonathan Levin: "How would you feel about artificial intelligence setting your insurance premiums thereby determining the price you pay based on, potentially, millions of inputs collected from social media, your spending history and technology embedded in your home and car?" Um, not good? My auto insurer offers a discount if I'm willing to put some sort of Big Brother app in my phone to monitor my driving habits. Since data along the lines of "he's headed back to Dunkin' for another sausage, egg and cheese breakfast empanada" isn't likely to bring those rates down, but could get my life insurance canceled, I've taken a pass. Jonathan has different, less self-absorbed thoughts than mine. "First, there's the issue of data-driven bias, a long-standing problem in insurance that predates the recent flurry of AI excitement," he writes. "Several studies have shown that the use of credit scores in underwriting car insurance has tended to push premiums higher for people of color, even after holding driving history constant ... Now, AI's proliferation could bring a plethora of additional variables into the process, including social media posts, purchasing habits and higher-frequency location data. In a worst-case scenario, AI could mean data-driven bias on steroids." While Jonathan is worried about bias against Black and Hispanic Americans, Paul J. Davies sees the plight of a less-oppressed group : bankers. "What if AI in the hands of bank customers automates the dull work of shopping for the best rates on simple financial products at irresistible speeds?" he asks. "It probably won't be long before generative AI bots can look after our money with utmost efficiency. Great for customers, but not so much for banks." Sounds great — high-interest savings accounts all around! Or maybe not. "Banks will hate this and fight it every step of the way. And if banks' funding and assets can appear and disappear minute-to-minute, depending on small changes in rates, that will likely be highly destabilizing for individual lenders and the entire system," Paul writes. "The collapse of four US regional banks and Credit Suisse last year showed just how fast a run can happen in a world of social media and effortless online withdrawals … AI bots constantly moving money for the best rate could kill a bank entirely by accident without anyone having queried its safety." Chalk another one up for Robot Maria. Bonus Robot Man Reading and Listening: - Giving Intel $20 Billion Exposes American Weakness — Karl W. Smith
- Accountants Can Use the Help Provided By AI— Romesh Ratnesar
- Reddit to the Moon Won't Launch an IPO Boom — Paul J. Davies
April 3: ADP employment change April 4: US trade balance April 5: US unemployment - Polls Don't Tell You Michigan's Rebound Began With Biden — Matthew A. Winkler
Imaginative treatment of AI's potential isn't limited to movies of course, and as usual, Niall Ferguson leans toward the literary. "The novelist Neal Stephenson's prophetic power never ceases to astonish. The Diamond Age (1995), is set in a technologically highly advanced world, with ubiquitous nanotechnology in addition to something strangely familiar called 'P.I.'," Niall writes. "There is an important warning here for everyone giddy with the recent advances of generative AI. Breathtaking developments in the realm of technology do not render history obsolete. It lives on alongside the latest gadgetry, because the present is not where history ends and the future begins; it is where the past and the future fuse." That future looks grim. More Niall: - With the advent of artificial general intelligence, even more radical outcomes are imaginable, in which it could cease to make sense to employ humans in most roles, including even enterprise leadership.
- Technological change has a long history of causing political controversy and social disruption, but organized resistance has rarely succeeded in preventing adoption.
- A key concern is that AI still "hallucinates" (i.e., makes stuff up) much more than humans do. The real determinant of market adoption is what AI can do with human-or-better reliability.
And to come full circle, "AGI is the stuff of science fiction (think of HAL 9000 in Arthur C. Clarke's 2001: A Space Odyssey)," Niall writes. "That does not mean it cannot become fact, like the nanotechnology and talking books of The Diamond Age." Which makes one wonder, is it the beginning of the end, or the Dawn of Man? Notes: Please send breakfast empanadas and feedback to Tobin Harshaw at tharshaw@bloomberg.net. | 
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