“Dear Pilot, thank you for your supervision!”

21

October

2017

5/5 (1)

 

Gerelateerde afbeelding

The year of the first plane: 1903

We have spent years and years to reach a centuries old human ambition: flying. Early planes however were considerably dangerous and many accidents happened over the course of centuries. Ranging from small to large accidents, the critical goal was that we needed more safety in the air.  We attempted to increase the safety of flying by building better planes and by educating our pilots to minimize danger.

Over time, planes have become much safer and the number of accidents have declined significantly. Technology has played a large part in this development. For instance, planes nowadays are more resilient in the air, can handle more unexpected events (such as storms) due to the developments in airplane technology. The role of communication technology in reducing aero accidents is critical as well. Especially when attempting to minimizing landing and takeoff accident.

Automated Pilot

However, there is one crucial element that has helped to diminish airplane related accidents: the automated pilot. The increasing number of safe flights is also related to the more frequent use of automatic pilots and a spur in the percentage of time that the automatic pilots fly a plane during flights.

Automatic pilots now fly 90% of the time (Mahoney, 2017). This not only makes the life of pilots easier, but reduces the amount of human errors as well.

Is there room for AI?

The future of AI pilots seems evident. Most accidents happening nowadays occur when the plane lands and when the plane heads off into the air (takeoff). If AI can facilitate safe takeoff and landing, then plane accidents can certainly be reduced. Several techniques that AI can take advantage off are (Flightsafetyaustralia, 2017).

  1. High-Powered parallel processing. Powerful chips can be used to increase computing power. Especially when related to graphical processing capability;
  2. Big Data. There is so much information that can be used. AI systems using the cloud to get their computing power can access many computers together to analyze this big data.
  3. Deep Learning. Means that AI can actually learn through trial and error. With enough flight data, AI can outlearn the human pilot.

Thoughts

AI can certainly work and replace the human pilot up to a certain level. Human supervision would be advised, certainly at the start. Nevertheless, in the future, everything is possible. Can AI fully replace the human pilot?

Personally, I think ethics come into play here. Trusting a non-human 100% of the time to fly our planes causes trust issues. At least for me. What do you think about it? Would you rather have a human pilot or an AI pilot in the future? Does your answer change when AI proves to be the statistical better of the two?

Afbeeldingsresultaat voor high tech cockpit artificial intelligence

References

  1. Mahoney, D, 2017. “Flying on autopilot improves airline safety but can lead to errors” Retrieved from: http://www.businessinsurance.com/article/00010101/NEWS06/302289983/Flying-on-autopilot-improves-airline-safety-but-can-lead-to-errors
  1. Flightsafetyaustralia, 2017. “Getting Smart Artificial intelligence and Aviation”. Retrieved from:  http://www.flightsafetyaustralia.com/2017/07/getting-smart-artificial-intelligence-and-aviation/

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Would you fully trust a machine to invest your savings?

26

September

2017

4.71/5 (78)

shutterstock_317361941_artificial_intelligence

“The most important general-purpose technology of our era is artificial intelligence, particularly machine learning (ML) — that is, the machine’s ability to keep improving its performance without humans having to explain exactly how to accomplish all the tasks it’s given. Within just the past few years machine learning has become far more effective and widely available. We can now build systems that learn how to perform tasks on their own.” – Brynjolfsson and McAfee (2017)

Personally, I am also fascinated by ML. Developments such as learning machines to beat the world’s best chess players, learning machines how to drive by themselves and learning machines to cook proper meals made me fantasize AI’s about possibilities.

If machines can be educated to become that smart, are they also able to invest money in the stock market? I am pretty certain they can, but can they earn better returns in contrast to professional managers? If they can, will they replace hedge fund managers in the future? In this blog post, I will evaluate how AI can be used in investments.

Tremendous amounts of research have been conducted in the area of investments. Some believe in technical analysis, some believe in company fundamentals and others analyse macro-environments. Analysing all this data requires great cognitive capabilities. Too great, even for the most cognitively gifted humans. This is where AI and ML can step in.

Machine learning involves deep-learning. Which makes machines able to handle enormous amounts of big data. Humans are simply unable to process such large amounts of data. Consequently, machines can use and handle significantly more data than a human investor can.

However, does this really mean that AI can outperform a human investor? The stock market is characterised by human greed, stupidity and emotion (Johnson, 2017). Therefore, using all available data in the world is no guarantee for good investment returns.

Then, is there no way for AI to be of use in investing? I think there is. The power of AI lies with the ability to learn everything and processing vast amounts of data (Dassori, 2017). AI in investments is a relatively new technique, and innovations can always provide a slight advantage over the competition. Professional investment firms also see this benefit, and invest rapidly in AI innovations.

In my opinion, having a machine advise you in trading, explaining you the rationale behind possible investments and help you to evaluate the effects of macro-economic events on your investments can be of serious aid. Nevertheless, for now, you should be in charge.

One last thought to take into consideration.. Even if robots that have been taught to invest can earn significantly higher risk adjusted returns compared against professional human investors, an ethical dilemma remains: would you fully trust a machine to invest your savings?

 

References

  1. Brynjolfsson, E. & McAfee, A, 2017. “The business of Artificial Intelligence”.
  2. Dassori, 2017. “Artificial intelligence for investing” Retrieved from: https://blogs.cfainstitute.org/investor/2017/05/31/artificial-intelligence-for-investing/
  3. Johnson, M, 2017. “When it comes to investing, human stupidity beats AI”. The Financial Times. Retrieved from: https://www.ft.com/content/244d8d60-1df9-11e7-b7d3-163f5a7f229c

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