Artificial intelligence and bias: what an investor considers

It’s no secret that technology often evolves much faster than laws and regulations designed to protect users and prevent tech companies from reaching for excessive broad powers. In this segment of Backstage Pass, registered on October 27, Fool contributors Rachel Warren, Brian Withers and Trevor Jennevine answer a member’s question about investment choices in the artificial intelligence space that not only make good financial sense, but respond to personal ethical concerns.

Rachel Warren: I just checked the Slido very quickly. We got a comment / question from ProShopGuy, the creation of the internet and cellphones created a social media genius. I am okay. It came out of a bottle and regulators are slow to catch up on new technologies. I am concerned about the ethical issues of new artificial intelligence technology. Should we get ahead of this new technology? Do any of you have a comment on this?

Brian Withers: Yes. It’s a tough thing about regulation, it struggles to keep up with technology. My hope is that similar to my quote from Spiderman for Facebook that is, these other companies that are using AI to power their platform is that they have good intentions, and Toby and I were talking about Progressive yesterday.

It was interesting that if you are using artificial intelligence to help you set your rates for different risk scenarios, one of the scenarios that Toby talks about, what is really interesting, he says, is that the people who park their cars on the street are more likely to have their cars damaged by people driving and hitting the rearview mirror or theft or whatever.

But people who park on the street are more likely to be low-income, long-distance, don’t have the money to pay to put their cars in secure parking lots, and so on.

It is true that if you park your car on the street, you are more likely to file a claim. It is probably true. But does it discriminate in one way or another? These aren’t easy problems to solve, so hopefully people can live up to their Spiderman mantra.

Trevor Jennevine: [laughs] I’ll add on that too. I think you’ve hit the nail on the head. From an investor’s perspective, I like to see that the company recognizes the risks and then addresses them in some way. Reacheduses artificial intelligence and they asked the Consumer Financial Protection Bureau to look at their models and they got this no-action letter that basically says we don’t see any bias here.

Lemonade has numerous blog posts explaining how she thinks artificial intelligence actually eliminates bias rather than integrating bias into the equation. But I do, absolutely, Brian, made a great point and it is. I think technology is changing faster than legislation. I think no matter what we do, we’re going to get to a point where AI is further ahead of the law or the rules and regulations, and there’s going to be a catch-up period. Hopefully we don’t end up with something like Skynet when this happens.

Rachel Warren: Definitely, okay.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

Leave a Comment