Gigaom AI Minute – January 16

Transcript

The financial industry is an early adopter of technology. Sometimes it uses it for good, optimizing capital markets and connecting buyers and sellers. Other times, however, enormous effort and capital is put into forms of competition that are useless and destructive.

Firm X figures out how to get their stock trades to execute just a millisecond faster, then Firm Y figures out how to beat that number by a nanosecond. These small units of time and these small improvements have an asymmetrical result. Huge amounts of profit flow from Firm X to Firm Y to Firm Z.

But it is a zero sum game. No consumer is better off by trades which close a nanosecond faster. But the financial world isn't the only one that exhibits this kind of destructive competition. And as we grow our ability to point ever more technology at solving different problems, we should give more thought on how to avoid an AI business arms race.