The New York Times, September 28, 2023. European Central Bank Is Experimenting With a New Tool: A.I. [read free] Artificial intelligence may help policymakers understand inflation and regulate big lenders, the central bank said. The European Central Bank said on Thursday that it was exploring ways to use artificial intelligence to better understand inflation and support its oversight of big banks, but stressed that these efforts were still in the early stages. The central bank is looking into how it can use large language models, similar to ChatGPT, for various purposes, Myriam Moufakkir, the bank’s chief services officer, wrote in a blog post. This includes preparing summaries and briefings that could be used to assist policy and decision-making; making the bank’s public statements easier to understand; and analyzing and comparing documents provided by banks. The bank already uses machine translations to communicate in many languages with people across the eurozone. The bank is assessing the use of artificial intelligence in nine projects.
The New York Times [unlocked], September 27, 2023. Amazon Is the Apex Predator of Our Platform Era. The Federal Trade Commission’s chair, Lina Khan, has brought her long-awaited, audacious case against Amazon, signaling the Biden administration’s determination to restore an approach to competition law that has been in decline since the Carter administration. This will doubtless draw fresh criticism about her supposed overreach. But Amazon is precisely the kind of company that Congress had in mind in enacting America’s many antitrust laws.
Crain’s Detroit Business, September 26, 2023. UM expert testifies on the dangers of AI in banking. Michael Wellman, professor and chair of computer science and engineering at the University of Michigan whose research focuses on the use of artificial intelligence in the banking and finance industry, was invited to speak to the U.S. Senate Committee on Banking, Housing and Urban Affairs last week regarding the implications of AI.
Bloomberg.com. September 26, 2023. OpenAI Seeks $90 Billion Valuation in Possible Share Sale, WSJ Says. OpenAI, the creator of ChatGPT, is talking to investors about a potential share sale that would value the startup at $80 billion to $90 billion, the Wall Street Journal reported. Such a valuation would be almost three times what the artificial intelligence startup was valued at earlier this year, the Journal said, citing unidentified people familiar with the discussions.
Fortune, September 25, 2023. Amazon has good reason to become Anthropic’s new AI BFF. The AI scene is shifting so quickly. Earlier this year, up-and-coming Anthropic partnered with Google, taking a $300 million investment for a reported 10% stake and making the Big Tech firm its “preferred cloud provider, giving [Anthropic] the compute power necessary to build reliable and trustworthy AI systems.” But that was, what, nine months ago? Ancient news. Now, Anthropic has a new BFF in Amazon’s cloud unit, which has been willing to invest a lot more—up to $4 billion, for an as-yet-undisclosed minority stake—and which now becomes Anthropic’s “primary cloud provider for mission critical workloads, including safety research and future foundation model development.”
Tech Crunch, September 22, 2023. South Africa’s FinanceGPT simplifies financial analysis, set to interface in local languages
Forbes, September 26, 2023. Don’t Pause AI, Finance, Or Thinking – We have had AI in finance for a long time, though it’s often synonymously called machine learning (ML). It’s an excellent application area because of the vast amount of data that finance provides. The presumption is that poor answers to these critical questions would argue for pauses or even outright bans. Let’s answer them for AI in finance and see if that broader presumption makes sense.
Gartner, Five Use Cases for CFOs with Generative AI. Q&A with Alex Bant. September 19, 2023. Generative AI will play a significant role for CFOs who plan to implement an autonomous finance function, but amid lofty claims of its potential society-transforming potential, details of specific use cases are often lacking. Experts at the Gartner CFO & Finance Executive Conference, taking place September 18-19 in London, are discussing the practicalities of implementing generative AI in a corporate finance function. We spoke with Alexander Bant, vice president for the Gartner Finance practice and conference chair, to discuss what use cases generative AI has in finance, and what forces are driving adoption.
CIO, September 19, 2023. 80% of Large Enterprise Finance Teams Will Use Internal AI Platforms by 2026. If implementing generative AI can make the finance function more agile, it has the potential to be a source of competitive advantage, says Gartner.
CNBC, September 18, 2023. Morgan Stanley kicks off generative AI era on Wall Street with assistant for financial advisors. Called the AI @ Morgan Stanley Assistant, the tool gives financial advisors speedy access to the bank’s “intellectual capital,” a database of about 100,000 research reports and documents, McMillan said in a recent interview.
The AI Arms Race. Citi Global Perspectives & Solutions – Generative AI has burst onto the scene following the launch of ChatGPT in 2022. As a concept, artificial intelligence (AI) is not new, and Generative AI represents the latest inflection point in the evolution of AI. However, what is distinctive about Generative AI is the tremendous potential it holds to transform work across industries and boost overall productivity. Taking a more holistic view, Generative AI might not only bring the power of AI itself to the masses but in fact accelerate the wider democratization of innovation. We believe it is a game changer. Although it feels like Generative AI has come out of nowhere, the rise of AI starting in the 1950s and through its significant growth over the past decade. This growth has brought with it a host of potential opportunities and challenges. The first wave of potential opportunities for Generative AI is centered on the technology value stack. Historically, the Silicon layer has been the de facto foundation of almost all technological shifts in the technology value stack, and Generative AI is expected to drive significant growth for compute (i.e., processing power), networking, and memory chips. However, we see opportunities in each layer. In the Infrastructure & Platforms layer, we see the hyperscalers/cloud providers racing today to build the underlying infrastructure that enables Generative AI applications and services, but over time we expect to see higher or more differentiation. When it comes to Models and Machine Learning Operations (MLOps), the open-source community is likely to be a key driver of innovation. Moving further up the stack, we believe nearly all software companies will be impacted in some form by Generative AI, and company-specific execution will be critical. Lastly, we believe Generative AI represents a step forward from ongoing AI/automation initiatives at the Services layer.
UK AI Safety Summit: introduction – Introduction to the AI Safety Summit 2023 that will take place on the 1 and 2 November at Bletchley Park, Buckinghamshire. Published 25 September 2023
Invisible Primes: Fintech Lending with Alternative Data. Marco Di Maggio, Dimuthu Ratnadiwakara, Don Carmichael. September 5, 2023. ECB. We exploit anonymized administrative data provided by a major fintech platform to investigate whether using alternative data to assess borrowers’ creditworthiness results in broader credit access. Comparing actual outcomes of the fintech platform’s model to counterfactual outcomes based on a “traditional model” used for regulatory reporting purposes, we find that the latter would result in a 70% higher probability of being rejected and higher interest rates for those approved. The borrowers most positively affected are the “invisible primes”–borrowers with low credit scores and short credit histories, but also a low propensity to default. We show that funding loans to these borrowers leads to better economic outcomes for the borrowers and higher returns for the fintech platform.
Lisa D Cook: Generative AI, productivity, the labor market, and choice behavior. Keynote address by Ms Lisa D Cook, Member of the Board of Governors of the Federal Reserve System, at the National Bureau of Economic Research Economics of Artificial Intelligence Conference, Fall 2023, Toronto, Canada, 22 September 2023. I will focus my remarks on generative AI, which creates new content largely in response to natural language prompts. As this audience knows, image and text classification-discriminative AI-has been in use for many years and is remarkably effective. I have used it to identify demographic characteristics of entrepreneurs in my own research. In contrast, effective generative AI is a very recent development and seems to be a leap forward into something new. Applications of generative AI range from the prosaic, like reducing the monotony of writing routine memos, to the wonderous, like protein structure prediction and drug discovery.