VTI - Investors Beware: AI Is Moving More Rapidly Into Government Decision-Making

2023-09-28 10:04:57 ET

Summary

• The argument for Artificial Intelligence is now being discussed in government circles.
• Information technology is advancing rapidly, leading to the spread of information and the need for faster and smarter decision-making.
• Governments need to embrace digitalization and contribute to the growth and spread of information to keep up with the evolving world.

Now, the argument for Artificial Intelligence ("AI") is moving into government circles.

Simon Kuper writes in the Financial Times:

"Democracies tend either to act too late, or quickly but stupidly."

"That's suboptimal, especially as life speeds up."

"AI advances almost weekly..."

"So how can we make democracies faster and smarter?"

The question?

"How can (democracies) jump straight from expert awareness to informed action?"

This is a universal question, one that has been with us from the start.

Whereas Mr. Kuper limits his focus to government decision-making, the narrative is one that is universal.

One of the major truths of history is that information grows and spreads.

Furthermore, the rate at which information grows and spreads generally accelerates through time.

And, there are special times when the acceleration is particularly increased through an innovative breakthrough that changes the way people do things.

One example of such a change that I have been reading about recently is the invention of printing.

The world changed with this innovation as more and more information could be collected, stored, and easily referenced when needed.

That, of course, is what is happening today with the development of information technology.

A change in how information is collected and stored can be world-changing.

Mr. Kuper writes:

"In the 2000s, start-ups such as Facebook and Uber began changing society before many politicians had heard of them. The academic paper that introduced the model behind ChatGPT in 2017 passed similarly unremarked."

Now, as information technology advances, and decision-making, in general, advances, the increase and spread of information injects itself into more and more and more areas.

The bottom line: the spread of information technology is going to become universal, the world is going to become digital, and more and more techniques, like AI, that advance decision-making are going to appear.

So, Mr. Kuper is crying for this movement to make its way into government circles.

"We can speed up political time."

The technology is there.

But, everyone is faced, in one way or another with this dilemma.

One problem confronting the advancement of the "new" information age is that some people...many people...still believe that the world does not have to be primarily digital.

That is not the issue they should be addressing.

The issue they should be addressing is this.

The world is going to become digital.

How can I work with this fact to help make the evolving world the best, most efficient, and safest world possible?

For example, if the world is going to be dominated by Central Bank Digital Currencies, how can we best protect the privacy of individuals or organizations so that a central body does not know everything about our financial affairs?

Maybe the solution can be found in the libertarian world of cryptocurrencies.

Maybe not.

But, the reality is, that we must consider cryptocurrencies and truly see whether or not they are a realistic alternative in the evolving digital world.

Information grows and spreads.

Every investor must accept this as a fact.

Not only should the investor keep this at the front of his or her thinking, but this is one thing investors should look for in the places they choose to place their money.

Investors must encourage and support those individuals or organizations that are promoting, as much as they can, the growth and spread of information.

This is the future.

And, this is where Mr. Kuper's argument fits into the picture.

Governments are usually among the last to respond to what is going on in society.

Mr. Kuper is just saying, that everything else is going digital, the government needs to go digital too, and make its own contribution to the growth and spread of information.

What he doesn't present in his argument is the fact that some other nations, some other governments, are now into the process of building major databases so that they can be at the forefront of what the government should be doing in order to achieve the goals of the government.

Unfortunately, these governments have generally been autocratic governments that are aiming to get their way in the world.

Mr. Kuper mentions in his article that autocratic governments generally do not do a real good job in making decisions that come from their autocratic leanings.

The point I want to make is that these governments are building databases to be used by AI systems so as to move ahead and stay ahead of non-autocratic governments.

The point that I take from this behavior is that we all must accept the fact that the situation is a global one.

Even autocratic governments accept the fact that information grows and spreads.

They also accept the fact that to stay ahead of their non-autocratic competition, they must build massive databases and they must give consideration to Artificial Intelligence to lead them on into the future.

If anything, the realization that some autocratic governments have moved into this space should cause investors to be more confident in an investment policy that includes organizational efforts to build up their own information processing efforts.

If this is where the world is going, this is where the eyes of the investor should be directed.

Just as the invention of the printing press changed who prospered and who did not in that earlier period, how this evolution of information technology has changed who prospers and who does not should be at the forefront of every investment strategy in the current period of time.

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