Irving Wladawsky-Berger

The Current State of AI: A Tale of Two Worlds

What’s the current state of AI? I’ve been closely following AI over the past several years, and based on everything I’ve read and written about in my blog, the question brings to mind Charles Dickens’ A Tale of Two Cities.

We have in fact a tale of two very different AI worlds. Ever since OpenAI released ChatGPT a few months ago and encouraged the general public to try it, we’ve seen article after article about its emergent unexpected capabilities and potential existential risks. But, at the same time, most recent surveys of the state of AI in the enterprise have concluded that the majority of surveyed companies are still in the early stages of deployment and have not achieved significant outcomes.

For example, Stanford’s recently published 2023 AI Index Report found that industry was now leading the development of state-of-the-art large language models like GPT-4 and chatbots like ChatGPT. But at the same time, the Stanford report references the most recent McKinsey global survey on AI which found that while leading edge firms continue to pull ahead, the number of companies adopting AI has plateaued.

The global survey, “The State of AI in 2022 — and a Half Decade in Review,” marks the fifth consecutive year in which McKinsey has analyzed AI’s impact on companies around the world. The 2022 report is based on a survey of almost 1,500 firms from a variety of regions, industries, and company sizes. Only about half of respondents said that their organization have adopted AI in at least one function.

Let me summarize the report’s key findings.

The Evolution of Global Supply Chains in the 21st Century Digital Economy

“The societal and economic spasms of the early 2020s highlighted the crucial role of world-spanning supply chains in the modern global economy, as well as the growing role of digital technology, including A.I. and automation, in the future economy,” wrote MIT professor Yossi Sheffi in the Preface of his new book The Magic Conveyor Belt: Supply Chains, A.I. and the Future of Work. In the Preface, Sheffi succinctly stated that “The central purpose of supply chains is to fulfill the needs and wants of humanity — delivering all the food, medicine, energy, apparel, and other worldly goods need by the eight billion people in the planet.”

The 1990s ushered a golden age of globalization. The world seemed to be coming together. Thomas Friedman’s The World is Flat became an international best-seller in 2005 by nicely explaining what globalization was all about, including the key forces that contributed to flattening the world, - from the collapse of the Berlin Wall in November of 1989 to the rise of outsourcing, offshoring and global supply chains.

“The golden age of globalisation, in 1990-2010, was something to behold,” wrote The Economist in a January, 2019 article.  “Commerce soared as the cost of shifting goods in ships and planes fell, phone calls got cheaper, tariffs were cut and the financial system liberalised.” But, ever since the 2008 global financial crisis, globalization and global trade started to slow down. “Globalisation has slowed from light speed to a snail’s pace in the past decade for several reasons,” said The Economist.

Three major shocks have further reshaped globalization: the increasing trade wars and tariffs of the past five years, especially between the US and China; the disruptive impact of Covid-19 on global supply chains; and more recently, the war in Ukraine, which threatens to further decouple the world’s economy into a Western and a Chinese trading bloc. Mohamed El-Erian, one of the world’s most influential economic thinkers, said in a recent podcast interview, that the rewiring of global supply chains is one of the major drivers of major structural changes in the global economy.

Why Men and Boys Are Falling Behind

A few weeks ago, Richard Reeves was Ezra Klein’s guest in his NY Times podcast “The Men — and Boys — Are Not Alright.” Reeves is a writer and Senior Fellow at the Brookings Institution, where he’s been studying inequality, poverty, social mobility, and family policy. His book, — Of Boys and Men: Why the Modern Male Is Struggling, Why It Matters, and What to Do about It, published in September of 2022, — is based on his research on the growing gender gaps in education and employment.

“We’re used to thinking about gender inequality as a story of insufficient progress for women and girls,” wrote Klein in the podcast’s introduction. “There’s a good reason for that: Men have dominated human societies for centuries, and myriad inequalities — from the gender pay gap to the dearth of female politicians and chief executives — persist to this day.”

“But Reeves’ core argument is that there’s no way to fully understand inequality in America today without understanding the ways that men and boys — particularly those from disadvantaged backgrounds — are falling behind. And they’re falling behind in ways that are tough on families, in ways that are tough on marriages, ways that are tough on children. And it gets much, much worse when you go down the income ladder.”

AI Need Not Be World-Ending to Be World-Changing.

“How to worry wisely about artificial intelligence” was the overall theme of the April 22 issue of The Economist, with several articles on the subject. “Rapid progress in AI is arousing fear as well as excitement. How worried should you be?,” said the issue’s lead article. “In particular, new ‘large language models’ (LLMs)—the sort that powers Chatgpt, a chatbot made by Openai, a startup—have surprised even their creators with their unexpected talents as they have been scaled up.”

“Proponents of AI argue for its potential to solve big problems by developing new drugs, designing new materials to help fight climate change, or untangling the complexities of fusion power. To others, the fact that AIs’ capabilities are already outrunning their creators’ understanding risks bringing to life the science-fiction disaster scenario of the machine that outsmarts its inventor, often with fatal consequences.”

The Economist issue included an essay, “How AI could change computing, culture and the course of history,” by European business editor Ludwig Siegele in close collaboration with briefings editor Oliver Morton. I found the essay quite interesting, and recognized that it had been written by Siegele, with whom I’ve long been discussing advanced technologies given his previous positions as technology correspondent for The Economist. Let me summarize the essay’s key points.