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Picture of Prosperity


How will Artificial Intelligence impact finances and financial planning? Part One – understanding the magnitude of the change underway.

The historian and author of the bestselling book “Sapiens”, Yuval Noah Harari, has compared the most recent developments of Artificial Intelligence (AI) to the equivalent of aliens appearing on the planet.

He argues that this is the first time humanity has encountered anything that competes with natural human intelligence, with the added aspect that very soon this intelligence will be capable of outperforming humans in a multitude of ways.

Ray Kurzweil, the futurist, with a highly credible track record of predictions, suggests that within six years, i.e. by 2030, on current trends, we will have reached a position where medical science will be delivering twelve months of survival prospect for each year we age.

Currently, modern medical interventions provide a four month advantage, for every year we age.

This is one of many astonishing predictions that he and others, well-informed and sensible people, not prone to exaggeration,  are offering to try and get us to ‘wake up’ to what is occurring right in front of us.

AI is not some distant threat or promise, it is here today and it is escalating in its reach at breathtaking speed, developing alongside many other new technologies, such as epigenetics and biotechnology.

All of this combined escalation, happening in parallel across many branches of science, are converging to present us with a completely different picture of the world around us. A picture that is currently difficult to see, but we already know is going to change everything.

The rate of escalation is tricky to measure, but some experts are suggesting we are seeing a sort of “doubling every year” effect.

To gain an understanding of what this means, people suggest the analogy of a sports stadium filling up with water. If the height of the waterline doubles every minute, and starts with a centimetre of water, then it takes about 7.5 minutes to get to a metre in height., about 15 minutes to get to 10 meters. Its only in the next 2 minutes (minutes 16 and 17) that the stadium gets properly filled. This is the doubling effect, to start with the impact is minimal, but towards the end it is vicious. In this analogy half way through the time period, towards total submersion, only around  5% of the stadium is under water.

So, the rate of development with AI has to be factored in, as much as any other aspect, because this situation appears not just to be unprecedented in terms of the nature of the tech being developed, i.e. with literal “intelligence” involved, but also in its roll out speed. Combine these two aspects, and we need to be paying close attention, and seeking as best and as fast we can, to understand what this means.

Within these articles we are going to focus in on finances, and draw from the general picture as much as possible, insight into how this will affect us in this specific  area, and, crucially, what we need to do to prepare and react. But, for now, we can conclude this is not a normal scenario and we need to deal with it on this basis.

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