Exploring the Transformative Potential of AI

Key Takeaways

What Is Today’s AI, and Is It Really Intelligent?

Artificial intelligence (AI) operates on the premise that machines can replicate human intelligence — specifically, our ability to influence the world around us.

For some, the goal of AI involves changing the world by developing computer programs capable of mimicking human intelligence. This includes learning and, ultimately, achieving sentience, or the capability to independently think, perceive and feel.

But given the technology and approaches used today, it’s not clear if that’s possible.

The birth of modern artificial intelligence dates to 1956 when Dartmouth math professor John McCarthy helped coin the term at an academic conference.¹ Later, during his long tenure as a Stanford University computer science professor, McCarthy earned the standing as the father of AI.

Since then, it’s taken roughly seven decades to advance to the launch of ChatGPT, a generative AI language model. GPT stands for “generative pre-trained transformer.” Mining a vast amount of preexisting data, it can generate various types of content, such as text, audio and images, based on user prompts.

Note that “generative” AI is not “general” intelligence. We aren’t describing HAL in “2001: A Space Odyssey” or Skynet in the “Terminator” movies.

Other AI applications include the use of robots on an assembly line or self-driving cars. All fall under an expansive definition of “artificial intelligence” technology, of which ChatGPT is simply one application.

Gartner Inc., the $5.5 billion global research and consulting firm, does not consider ChatGPT a form of “artificial general intelligence.”² That’s right. The supposed vanguard of the AI movement — the technology whose introduction late last fall attained widespread notoriety almost overnight — isn’t “intelligent” at all.

Gartner says ChatGPT isn’t even a new AI paradigm or replacement for traditional internet search engines. Moreover, the firm asserts it’s only a “partial” alternative to research tools and capabilities that have existed for years. “While ChatGPT and related large language models or foundation models have impressive capabilities,” Gartner says, “they cannot understand, learn or undertake any intellectual task that humans can.”

So, there you have it. Tremendous pomp and circumstance — along with fear and loathing — now accompany ChatGPT and other forms of AI. And when it comes to replacing the human brain, current AI technology isn’t ready for prime time.

How AI Already Influences Our World

AI is a powerful technology with the potential to profoundly shape the future across multiple generations. Scholars, economists, scientists, industrialists and futurists all agree that it will change the world as we know it.

It’s a technology whose recent public unveiling, in the form of ChatGPT, attracted a million users in its first five days and 100 million users within two months.³ (Once upon a time, another revolutionary technology, Facebook, took 10 months to secure a million users and 4.5 years to reach 100 million users.)⁴ See Figure 1.

Figure 1 | ChatGPT’s Popularity Is Unmatched Compared to Other Revolutionary Technology

Amount of Time to Reach 1 Million Users

^{Source: Statista.}

It’s a technology on which global companies will spend an estimated $500 billion next year.⁵

It’s a technology that Gartner predicts will lead to 100 million humans working with robocolleagues within three years. Goldman Sachs expects a $6 billion market for humanoid robots within the next decade — an amount that could swell to $154 billion in a best-case scenario.⁶

And it’s a technology whose market size is expected to grow at a 22% compound annual growth rate by 2030 to nearly $2 trillion in value.⁷ That’s more than the annual economic output of all but eight current global economies — more than Canada, South Korea, Brazil or Australia.⁸

What AI Means for Humanity

At its best, AI will allow us to offload mundane, time-consuming tasks and focus on more meaningful work and life experiences.

Beyond ChatGPT, AI is already on the verge of doing just that:

• It has the potential to curb or eliminate medical mistakes, including prescription errors that result in about a quarter of a million deaths annually in the U.S. An AI tool called DXplain has helped boost the accuracy rates of clinical diagnoses. AI can analyze bladder tumors at a 93% accuracy rate.⁹ And AI could eventually help paralyzed individuals perform day-to-day tasks.¹⁰

• AI can use predictive analytics and historical data to assess expected outcomes in legal cases.¹¹ PwC, meanwhile, has introduced a chatbot service to help its 4,000 attorneys work faster.¹²

• In finance and investment management, First National Bank of Omaha has teamed with AI lending platform provider Upstart to scale its personal loan program across the nation. In addition, two recent papers found that ChatGPT can use headlines to predict stock moves and “decode” statements from Federal Reserve officials.¹³

• Retailers already use AI for everything from forecasting sales to managing inventory. Large retailers, such as Kroger and Walmart, have increased the push for autonomous vehicles, shown to reduce logistics-related expenses by as much as 30%.¹⁴

• Robotaxis navigate select cities around the U.S. Mass adoption of self-driving cars could revolutionize travel, potentially resulting in fewer vehicle accidents and deaths. They could also improve traffic flow, fuel efficiency and carbon emissions.¹⁵

But at its worst, AI also presents some threats.

AI has the potential to introduce a new frontier in spreading misinformation. Meanwhile, the U.S. Copyright Office in March began studying AI issues, including the use of copyrighted materials to train AI models.¹⁶

Stanford’s annual Artificial Intelligence Index Report — a survey of nearly 500 academics, industry professionals and public sector workers involved in AI natural language processing — elicits even more alarm. Of those surveyed, 36% agree that “AI decisions could cause a nuclear-level catastrophe.”¹⁷ Nearly three-quarters of survey respondents agreed that “AI could soon lead to revolutionary societal change.”

Reflecting these concerns, ChatGPT owner OpenAI recently called for an international regulatory body to oversee the technology's development.¹⁸ But it’s not clear if any single nation or international body has the knowledge and wherewithal to account for the far-reaching implications such technology brings.

What We’ll Cover in Our AI Series

Of course, all technology has the capacity for misuse while otherwise advancing social progress. Our series will assess ways society can limit abuses and harness AI for the greater good.

Our first article explores AI’s economic impact, including its potential effects on growth and productivity globally.

Later articles will dig more deeply into ChatGPT’s specific opportunities and challenges. We’ll also look at who we believe will be the likely winners from a corporate and industry perspective.

We’ll highlight how we think AI will impact the global market for semiconductors. And finally, we’ll examine social and ethical considerations from an investment standpoint.

We hope you’ll join us on this journey. Because in a world introduced to TV, space exploration, personal computers and do-everything cellphones in the past century, AI may have the potential to top them all.