RUTH SUNDERLAND: When reality bites AI it will be brutal
One of the under-rated joys of newspapers are the ‘news in briefs’. These NIBs, whether abbreviated reports of crime and scandal, a short City story or merely a nugget of timely information, can be fascinating.
Flaubert famously wrote Madame Bovary after stumbling upon a ‘fait divers’ – the French version of a NIB – about Delphine Delamare, the wife of a country doctor who committed suicide after having affairs and running up debts.
It’s rare for a humble NIB to inspire a great novel, but they can give a glimpse into wider social and financial issues.
A short item about lab-grown diamonds last week provoked thoughts about what counts as ‘real’ in markets, society and culture nowadays.
The NIB in question recounted that the Advertising Standards Authority had rapped the knuckles of two companies for failing to disclose their gems were synthetic. Interesting, since the value of ‘real’ diamonds is itself largely determined by marketing, not inherent worth. De Beers’ slogan ‘Diamonds are Forever’ is possibly the most successful of all time.
It isn’t just real v synthetic diamonds. Bitcoin depends solely on the belief of those who ‘invest’ in it, and its alleged creator may not even be a real person.
Touching the void?: The question of what is real and what is fake or bogus is as old as humanity but is reaching a new pitch
But a ten-pound note has no intrinsic value either: the ‘realness’ of money is a social construct enforced by central banks and governments.
The question of what is real and what is fake or bogus is as old as humanity but is reaching a new pitch.
In music and art, deepfakes and synthetic performances sit alongside human creativity. Slimming jabs are a multi-million pound business, but is this route to weight loss cheating compared with an old-school diet?
Why are our screens rammed with ‘reality TV shows’, a blatant misnomer since they are predicated on highly manufactured situations? Have real politicians been replaced by a parade of absurdly underqualified pretenders?
It seems hallucinatory that Angela Rayner and Andy Burnham seriously think they should be Prime Minister. One wonders whether politics is suffering from an epidemic of reverse imposter syndrome.
In Ireland, a well-known convicted criminal, Gerry ‘The Monk’ Hutch, is running this week for a seat in a by-election. Perhaps it is a matter of time before it happens in the UK.
As for who enforces reality in a world of sham narratives, it is left to that band of merciless realists known as bond market vigilantes to act as a brake on economically illiterate politicians. By the way, these vigilantes may be algorithms, not people.
Hovering above all of it are questions about Artificial Intelligence (AI).
Nowhere is the question of real versus imagined value more vertiginous than in AI.
Valuations for the likes of chipmaker Nvidia, which was earlier this week moving towards a market capitalisation of $6 trillion, defy gravity.
No-one really knows whether the eventual revenues will justify the vast spending on AI, which companies will capture the value, whether rising energy costs and supply constraints will spoil the party or how the battle between China and the US for dominance will play out.
Little wonder observers from the Bank of England to veteran investor Warren Buffett fear rampant hype and warn that the bubble at some point will burst.
We have constructed whole industries, asset classes and political cultures on the basis of ersatz value.
The reckoning, when it comes, will be brutally real.
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