AI Errors from Money Trades to Self-Driving Cars & Healthcare
Some AI hedge fund managers have developed a reputation for beating their human counterparts in trades, but in at least one instance, the AI program lost one investor more than $20 million–and he’s suing.
A story on Bloomberg.com detailed how London-based Tyndaris Investments recommended the robot investor, named K1, to manage the portfolio of a Hong Kong real estate tycoon named Samathur Li Kin-kan, whose father owns much of London’s Chinatown. The supercomputer scanned online sources like real-time news and social media to gauge investor sentiment and make predictions on U.S. stock futures. It then sent instructions to a broker to execute trades, adjusting its strategy according to its learning curve.
Li is suing Tyndaris for exaggerating the computer’s skills after it lost $23 million. He is also refusing to pay the $3 million broker fee. According to Bloomberg, this case may be the first of its kind in pursuing legal remedies when AI goes wrong.
“The legal battle is a sign of what’s in store as AI is incorporated into all facets of life, from self-driving cars to virtual assistants,” the Bloomberg story states. “When the technology misfires, where the blame lies is open to interpretation. In March, U.S. criminal prosecutors let Uber Technologies Inc. off the hook for the death of a 49-year-old pedestrian killed by one of its autonomous cars.”
While the Uber victim’s family was compensated in a private settlement, the case begs the question of what could happen if a car inadvertently kills a driver or another pedestrian in the future. Or loses millions for future clients. AI is in wide use in the banking and investing industries.
A story in Futurism.com explores the topic, noting that AI could impact lives in areas ranging from transportation to medical diagnoses to law enforcement. Another piece in The Motley Fool, entitled “6 Scary Stories of AI Gone Wrong” includes examples ranging from children ordering products through Alexa to Sophia the robot believing that its founder wanted her to “destroy humans.”
The trial, scheduled for April 2020, will be one of the first multi-million-dollar cases, but it certainly won’t be the last.