The Rise of Prediction Factories - How AI Allows Us to Replace Rules with Decisions - Tiago Forte

author:: Tiago Forte
tags:: #source/article AI

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at the fundamental economic level, AI is about dramatically lowering the cost of prediction

When you ask ChatGPT “What is the capital of Delaware?”, the machine learning algorithm that powers it doesn’t “know” the answer in any sense. Instead, it is predicting “What does the user want to hear?”

as the price drops, demand goes up

Note that the digital spreadsheet eliminated the most time-consuming activity for bookkeepers: doing arithmetic calculations. You might think that the entire profession would have disappeared as a result. But products like VisiCalc (the very first spreadsheet computer program) actually made their work more valuable overall.

One reason prediction is currently so expensive and so few are qualified to provide it is that it is bundled with another rare quality: judgment.

To exercise judgment, you need to know what you want, and how much it matters to you to get it. It is about making tradeoffs to achieve the highest value possible from the options at hand.

Both prediction and judgment are combined to produce a crucial capability: decision-making. Decision-making is at the core of most occupations today, not to mention every moment of our daily lives.

AI is a disruption to this rules-based order in which we live. If our rules exist to save us energy, and the reason we need to save energy is because decisions are so taxing, and one of the key inputs to decisions are predictions, then by making predictions cheap and plentiful, AI changes the very basis on which our society runs.

And finally, a sense of perspective is a complement to prediction that will rise in value. One definition of wisdom is “broad framing” – not losing sight of the big picture and keeping seemingly intractable problems and crises in perspective. As each element of decision-making gets increasingly unbundled into ever more specialized and narrow algorithms, this kind of broad perspective will become even more challenging to maintain than it already is.

Electricity was such a radical breakthrough that it required a new system-level solution. It decoupled energy use from its source, challenging deep assumptions that had been embedded in manufacturing for decades if not centuries.

Artificial Intelligence is of similar magnitude: by decoupling prediction from the rest of the decision-making process, it is reshaping how intelligence is accessed and applied. In turn, that is shifting where and how we as humans apply our own thinking to solve problems.

AI will also take a long time to be deployed – probably decades

AI often automates a task, but rarely an entire job

AI represents the rise of a new source of competition for us humans. Not only do we have to worry about other people taking our jobs, intelligent machines will substitute for an increasing number of the tasks we perform as well.

  1. Which rules I’m currently following could be replaced with a decision?

  2. How can I enhance my judgment using AI prediction?

  3. How can I find and access new, unconventional sources of data?

  4. What is the smallest number of decisions I can make to achieve my mission?

Given this new predictive superpower we now have access to, there will be tremendous value in structuring an activity so that it requires as few human decisions as possible.

  1. What information, if supplied to AI, would allow me to make better predictions?

almost any ChatGPT prompt can benefit from more rules and guidelines, specific details, background context, and examples for how to understand what you’re asking