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Tag: Business Inisghts

AI Revolution: Unveiling the Transformative Power and Unforeseen Consequences

The technology buzz over the last several months is the rapid revolution of AI (artificial intelligence) and such new manifestations of it like ChatGPT (Generative Pre-trained Transformer) that, it is said, can draw on the vast universe of all human knowledge to generate human-like writing and question responses/answers at super-human speed. AI can, apparently, also write its own computing code to solve challenges instantaneously; apparently AI is capable, or soon will be, of performing tasks in mere minutes that it would take actual human engineers a billion hours to complete. Just so you know, a billion hours is 114,155.251 years.

READ: AI in Insurance: How New Technologies are Changing the Game

I’ve been reading up on AI and the related robotics developments tied to it, and I watched the “60 Minutes” report from Scott Pelley on AI, and I have naturally been astounded by the leaps in technology. Thrillingly, the developers of AI point out the enormous and powerful potential benefits of the technology, like giant leaps in medicine and combating climate change and a host of other worthy challenges. I have also been horrified by the declarations of the people at such firms as Google developing AI that even they don’t quite fully understand how it is capable of the things it is doing.  

It strikes me that this is all the plot of scores of movies and several episodes of “The Twilight Zone” where people invent machines that eventually figure out they don’t need people at all. As “Twilight Zone” creator Rod Serling so presciently put it more than 60 years ago at the end of one such episode, “… too often man becomes clever instead of becoming wise, he becomes inventive, but not thoughtful. And sometimes … he can create himself right out of existence.” Cue the creepy “Twilight Zone” music… 

So what is AI? I went to the new Microsoft Bing Chat bot and requested a short paragraph explaining AI, and it generated: “Artificial intelligence is a branch of computer science that focuses on building and managing technology that can learn to autonomously make decisions and carry out actions on behalf of a human being. AI refers to the simulation of human intelligence in machines that are programmed to think like humans and mimic their actions. The term may also be applied to any machine that exhibits traits associated with a human mind such as learning and problem-solving.”  

That last bit worried me in that “traits associated with the human mind” can also, obviously, include callousness, malevolence, cruelty, violence and, most problematically, very narrow self-interest. I also asked the Bing chat bot to address the dangers of AI, and it replied: “invasion of personal data, risk of cyber attack, discrimination and bias, opacity and lack of transparency, replacement of jobs and unemployment, and socioeconomic inequality.” Then it added: “We need to ensure that AI is developed and deployed in a way that respects human dignity, rights, and interests.” The damn thing scares even itself!  

READ: AI in Employment — A Troubling Issue in the Hiring Process

In the end I don’t really worry about the technology and the machines themselves, as they have no real built-in egos and agendas. But the people who control them do have egos, and personal and business motivations. That, I believe, is the real issue here: the too-few people involved in the creation and deployment of these technologies are automatically and inexorably suspect. And we don’t seem to have any real checks and balances in place.  

These few developers — Google, Microsoft, a micro set of startups and a few companies in Europe and China — all give out the same earnest platitudes that they are protecting privacy and security, while at the same time setting a goal of creating more jobs than they supplant. They are, so they say, benevolent.    

Big oil said the same 100 years ago, but clearer minds thought the monopoly was so threatening that we broke up Standard Oil. That was just oil — Artificial Intelligence is everything.  

No matter what they do or say, the business motivation can and will be, at least in part, a stark contrast to public interest.    

We would do well to revisit the cartoonist Walt Kelly’s response to pollution on the first Earth Day. Looking at all the trash, he had his famous character Pogo say: “We have met the enemy and he is us.” 

 

Jeff RundlesJeff Rundles is a former editor of ColoradoBiz and a regular columnist. Read this and Rundles’ blog, Executive Wheels, at cobizmag.com or email him at [email protected]. 

Finding the Silver Lining Amidst Rising Interest and Inflation Rates

Between bear markets in both stocks and bonds and mortgage rates doubling in 2022, is there any good news out there? Believe it or not, there is. Because of the massive rise in inflation this year, starting January 1, 2023, the Federal government is increasing Social Security payouts, raising 401k and IRA contribution limits, expanding the standard tax deduction, and increasing estate tax and annual tax-free gifts limits. For the first time in 14 years, you can also earn 4% on short-term treasury bills. Taking advantage of these changes next year could help you financially. According to the Wall Street Journal, here are some specific ways to improve your financial situation in 2023.

READ — What Does a Recession Mean for Your Finances? 

Social Security and Payroll Tax

Thanks to inflation this year, Social Security checks will be 8.7% higher than in 2022, the biggest increase in 40 years. For retirees, the average check will go up from $1,669 to $1,814. The Social Security payroll tax, which applies to W2 earnings, will go up 8.9% from $147,000 to $160,200, allowing taxpayers to shield an extra $13,200 from being taxed.

READ — Mapping Out Financial Success with Retirement Planning

Bigger Standard Tax Deduction, Higher Tax Brackets Limits, and Higher HSA Amounts

The standard personal tax deduction increases 7% next year, going from $12,950 to $13,850 for individuals and from $25,900 to $27,700 for couples. The HSA healthcare flexible spending account amount will go up from $2,850 to $3,050. All the marginal tax brackets have been adjusted 7% higher to reflect higher inflation. All these changes will help taxpayers keep more of their income.

Higher Estate Tax Limit and Annual Gift Change

Individuals will be able to transfer $12.92 million to their heirs tax-free during their lifetimes. The old amount was $12.06 million. This is a 9.3% increase. Combined couples can give away $25.84 million in 2023. However, this estate tax law is set to revert back to $5 million adjusted for inflation on January 1, 2026, when the 2017 tax cuts expire.

The annual tax-free gift increases from $16,000 to $17,000 next year. Married couples will be able to give away a total of $34,000 a year tax-free. These gifts can be a great way to reduce the size of your estate, particularly if you make them on an annual basis.

Higher 401k and IRA Contribution Limits

There is a 10% increase in the amount of money people can contribute to their 401k(s) in 2023. The limit for 401ks last year was $20,500; in 2023, it will go up to $22,500. The IRA limit will increase by 8% or $500 (from $6000 to $6,500). If you are over 50, the amounts are even higher: $7,500 from $7,000 last year.

Three-Month Treasury Bills Yield 4%

You haven’t been able to earn 4% on short-term treasury bills since 2008. Today, because of the much higher Fed Funds rate, the Federal government is paying 4% on 3-month treasury bills. A year ago, it was practically zero. If interest rates continue to rise, you can reinvest at a higher rate or get your money back when these bills mature. If you want to have 6-9 months of cash in reserve, treasury bills are a great alternative now. Cash is no longer trash.

It’s not all bad news heading into the new year. These inflation-adjusted changes and higher short-term treasury rates are a real benefit to Americans. And suppose the Federal Reserve is successful in bringing inflation down from 8.2% today to a more manageable level in 2023. In that case, we could potentially see a relief rally in both the stock and bond markets and a stabilization in mortgage rates.

READ — Choose Your Own Adventure: What’s Your Investment Path?

 

Important Disclosure:

Thumbnail Fred Taylor HeadshotFrederick Taylor is a Partner, Managing Director at Beacon Pointe Advisors, LLC. The information contained in this article is for general informational purposes only. Opinions referenced are as of the publication date and may be modified due to changes in the market or economic conditions and may not necessarily come to pass. Forward-looking statements cannot be guaranteed. Past performance is not a guarantee of future results. Beacon Pointe has exercised all reasonable professional care in preparing this information. The information has been obtained from sources we believe to be reliable; however, Beacon Pointe has not independently verified or attested to the accuracy or authenticity of the information. The discussions, outlook, and viewpoints featured are not intended to be investment advice and do not consider specific investment objectives or risk tolerance you may have. All investments involve risks, including the loss of principal. Consult your financial professional for guidance specific to your circumstances.