Home Posts tagged AI

Wall Street Goes Orbital with SpaceX IPO

By Contributor
Wealth Management

Preparing for Takeoff

Brendan Roberts

SpaceX conducted its initial public offering last week at a $1.77 trillion market cap, making it the largest IPO ever; it has surged significantly since. By trading at this valuation, it became a top-10 market cap company on day one, leapfrogging Tesla itself in in the process. SpaceX is also projected to do less than two-thirds the revenue of Tesla this year, all while having negative cash flow.

To put that in perspective, when Google first became public in 2004, it was a $23 billion market cap and didn’t even place in the top 100 companies by market cap. Meta Platforms (Facebook) debuted in 2012 at a $104 billion market cap, placing it inside the top 25 most valuable companies at that time, surpassing heavyweights like Amazon, Citigroup, and McDonald’s.

Artificial intelligence continues to permeate markets the same way the internet captivated the world when it went mainstream in the late ’90s. The IPO window is open, and SpaceX is just the beginning.

Later this year, the companies behind ChatGPT (OpenAI) and Claude Code (Anthropic) are in a full sprint to list their shares publicly as well. They have seen the fastest product adoption since smartphones, the internet, and social media. If you thought launching rockets into space was ambitious, these companies double their revenue every few months. Despite the macro headwinds from multiple global conflicts, persistent inflation, and lower-income consumers under pressure, the markets continue to creep higher. 

Although there are many different polarizing conversations to have about AI and IPOs, we now must consider how these firms fit into our world of investing. Are owning these companies considered high-risk? Is it appropriate for people entering retirement to hold a position like SpaceX, Anthropic, or OpenAI? Are passive indices such as the S&P 500 eventually going to have exposure to these companies? What about my retirement funds? These are the type of client questions we’ve received — and they are timely conversations to have with your financial advisor.

Is Passive Index Investing at Risk?

Passive indexing, the S&P 500 as one example, gives you broad exposure to the U.S. economy by proportionally allocating capital to the largest public companies by market cap weighting. New risks may arise, however, if companies like SpaceX, Anthropic, OpenAI, and others are included in the index well before they generate positive cash flow. If a company cannot generate positive cash flow, it makes it more difficult to support paying a dividend or buying back company stock. Therefore, it’s very unlikely a company can return capital to shareholders until they do generate positive cash flow.

This means, as an investor, most (if not all) of your investment returns must come from price appreciation through the stock price heading higher, which is driven by investor sentiment. 

“Artificial intelligence continues to permeate markets the same way the internet captivated the world when it went mainstream in the late ’90s. The IPO window is open, and SpaceX is just the beginning.”

Although this is certainly a possibility, as it is with any stock, an investor must consider the risks of the stock itself, in addition to the market dynamics at play, to potentially make a positive return on their investment. Many of the early insiders who owned these companies prior to the IPO have already made a ton of money and will advantageously use the IPO as an exit strategy — i.e., sell their shares to capture some, if not all, of their profits.

However, there are lockups involved for insiders and employees, meaning they cannot divest their shares immediately when the stock first begins trading. This could result in many months (if not years) of selling pressure as investors look to ring the register on a company they’ve already made a lot of money from. One may question, what about the passive indices? Won’t they be forced to buy the IPO since it’s projected to be a top 10 market cap company? Not necessarily.

Bending Rules Based Investing

The Nasdaq Composite is an index comprised of the 100 largest non-financial companies listed on the exchange. This index is already dominated primarily by tech, software, and telecommunications sectors. Previously, a stock would have to be a public company for at least three full calendar months before being considered for inclusion in the index.

Surprisingly, Nasdaq implemented a new ‘fast entry’ rule effective May 1 of this year, by which the top 40 non-financial companies can be fast-tracked into the index in as little as 15 days. This is a rule change that occurred just months before the SpaceX IPO, which raised concerns for many investors. 

The S&P 500 index has a rule where a company would have to demonstrate cumulative GAAP profitability over the most recent four consecutive earnings reports to qualify for inclusion in the index. Previously, S&P Global considered making an exclusion for ‘megacap’ companies like the three IPOs discussed today, but they recently changed their tone and said they will not make any exceptions. This means it will likely be some time before SpaceX is included in the S&P 500, as it is not likely to meet the profitability metrics in the near term required for inclusion.

S&P Global is in a difficult position because, if they do not include SpaceX, it could result in a tracking error and possibly worse performance than funds that do choose to allocate capital to the company. Alternatively speaking, if they manipulate their own rules to try to include a company with no cash flow, it could compromise their rules-based investing approach, which has worked for decades.

Active Versus Passive Investing

Actively managed investing involves someone selecting the investments rather than getting exposure to a defined basket of investments as determined by an index fund. For example, someone about to enter retirement or already in retirement may not view SpaceX as an appropriate investment for them, given it’s considered high-risk as measured by its lack of profitability, lofty valuation, and continuous share dilution, among many other risks.

Something else to consider is the tax consequences of where you choose to hold the stock. If the SpaceX IPO is not successful and the stock price falls significantly, you could benefit from realizing a loss in a taxable account as a tax write-off as opposed to a retirement account, where you could not write it off.

Conversely speaking, if SpaceX makes new highs and you have significant gains in a taxable account, you would have to factor in capital gains tax when choosing to sell the position. If it were held in a retirement account, there would be no tax consequences to selling the position at a gain. (With any financial advice, it should be tailored to the individual, family, or institution.)

Unfortunately, there is not a one-size-fits-all solution to decide if these IPOs are appropriate investments for you or not. Fortunately, there are plenty of capable investment professionals to have this conversation with you and help determine what is appropriate for your situation. 

We will be watching these IPOs intently in the coming months. Although the prospect of exposure to such a disruptive and innovative company is compelling on the surface, we remind investors to proceed with extra caution with IPOs, especially when they are widely hyped and sought after by the public.

Brendan Roberts is a portfolio manager at St. Germain Investment Management, serving in a dual role as both an advisor and a member of the firm’s investment policy committee. His responsibilities include equity research, trading, and financial advising.

St. Germain Investment Management does not intend or suggest investment advice through this information. This information is provided for educational purposes only and should not be construed as advice. This presentation has been prepared without consideration to the circumstances and objectives of a particular individual; therefore, investment vehicles mentioned may not be suitable. Investors should carefully consider risks, investment objectives, fees, and potential expenses before investing. Individual results may vary, and past performance does not guarantee future results. Market and economic conditions beyond our control, such as inflation, interest rates, and other exogenous events, may or may not have played a role during the time period, and such conditions or material data, whether in whole or part, does not suggest similar investment outcomes in the future or that such conditions would prevail in like fashion. Neither the data nor rate of return reflect the particular objectives or investment goals of any individual, group, or company at St. Germain Investment Management.

Evolving Technology Is Changing How Businesses Operate

By Contributor
Technology

Straight Talk About AI

By Sean Hogan

AI is everywhere right now. I have never seen a new technology move as fast as this. The pace of change is hard to keep up with, and it is already changing how businesses operate on a daily basis.

In our office, we have been using AI across several areas. Like most companies, we started with the basics. We used tools like Chat and Copilot to help with content writing, documentation, and internal processes. These tools helped us build standards and procedures faster than before.

The impact was immediate. Tasks that used to take hours, like drafting documents or editing content, could now be done in a fraction of the time. We used AI to create job descriptions, prepare presentations, and clean up written communication. It did not replace our work, but it removed a lot of the repetitive effort that slows teams down. That was what I would call phase one of AI.

The next step came when we introduced meeting transcription and summaries. We started using Otter to capture our meetings and generate notes automatically. This was a turning point for us. Instead of worrying about who was taking notes or what might be missed, we had a full record of every conversation.

This made our meetings more productive. People could stay focused instead of trying to write everything down. After the meeting, we had clear summaries, action items, and records we could refer back to. It saved time and reduced confusion. It also helped with accountability because everyone could see what was discussed and what needed to happen next.

Sean Hogan

Sean Hogan

“AI is not just for fun. It can support real marketing efforts, from content creation to visual design to campaign planning. It helps teams move faster and test ideas more easily.”

As useful as that was, AI did not stop there. We quickly moved into what I would call phase two.

AI has become a major force in marketing and design. When we first experimented with AI-generated images and branding, the results were rough. Tools struggled with basic things like spelling and consistency. Logos looked off, and text often did not make sense.

That has changed very quickly. Today, these tools are far more capable. They can generate clean visuals, help brainstorm campaign ideas, and support content creation at scale. My kids actually introduced me to Grok, and we had some fun turning still images into short videos. While that started as entertainment, it showed me how fast the technology was improving.

More importantly, it showed how we could use these tools in a business setting. AI is not just for fun. It can support real marketing efforts, from content creation to visual design to campaign planning. It helps teams move faster and test ideas more easily.

 

Next Steps

From there, we expanded AI into our broader technology stack. We are no longer using it just for administrative tasks or marketing support. We are using it to improve productivity and efficiency across the business.

One of the biggest changes has been in our help desk operations. We have introduced AI into our tier-one support process. With the help of an AI management layer, we can now resolve and remediate common support tickets using a proprietary AI tool. This allows us to handle routine issues quickly and consistently.

The benefit is clear. Our technicians are no longer tied up with repetitive tickets. They can focus on more complex problems that require deeper expertise. This improves both the quality of our service and the development of our team.

It also allows us to deliver a higher level of support to our clients. Instead of spending time on basic issues, our team can focus on solving bigger challenges and providing more value.

Our most recent addition is an AI-powered auto attendant. This is not the old style phone system that most people are used to. This is an agent that can answer calls, ask the right questions, and gather the information we need to help the client. It acts as the first point of contact and sets the tone for the entire interaction.

This has been a major improvement for both our team and our clients. Instead of sending calls to voicemail, clients can speak to an agent right away. The agent collects the necessary details, understands the request, and documents the conversation. That information is then passed along to the appropriate person or team.

Anyone who has ever had to repeat the same issue to multiple people knows how frustrating that can be. This process reduces that problem. The full conversation and transcript are captured and shared, so the next person already has the context they need. If a client needs to open a support ticket, the agent can guide them through the process step by step. It ensures that all required information is collected up front.

There is also a level of consistency that is hard to achieve otherwise. The agent does not forget to ask key questions. It does not miss details. It does not have a bad day or get distracted.

For years, I have emphasized to our team the importance of collecting and confirming information on every call. Do we have the correct phone number? The right email address? The proper contact details? These are simple things, but they matter. The AI agent handles this every time without fail.

We are also looking ahead at how AI can integrate with other systems, including CRM platforms, ERP systems, and inventory management. The goal is to create a more connected environment where information flows smoothly and processes are more efficient.

 

Risk and Reward

This is an exciting time to be in technology. AI represents a major shift, and we are choosing to embrace it.

That said, AI is not without risk. You need to be careful with how you handle data and personal information. Security and privacy should always be a priority. AI tools are powerful, but they need to be used responsibly. That is a much larger topic and one worth discussing in detail on its own.

AI is not perfect, but it is very capable. It can handle complex tasks, support decision making, and free up time for more important work. The key is to use it as a tool. Challenge it. Test it. Find ways to apply it that make your business stronger and more efficient. If you ignore it, you will fall behind. If you use it wisely, it can give you a real advantage.

One last note: I still write my own blogs. But once I am done, I run them through AI to proofread and clean things up. It turns out AI is pretty good at that, too.

 

Sean Hogan is president of Hogan Technology Inc.

BusinessWest Workshop Series to Address Potential of AI

By
Cover Story

Joining the Revolution

 

When asked to generalize about how much manufacturers know about artificial intelligence (AI), Scott Longley said, “well, they know the letters. Beyond that…”

Elaborating, he said most manufacturers understand that AI is coming at them fast, that it will be revolutionary in its impact (if it isn’t already), and that they need to get on this train — and soon — to remain competitive. But they don’t yet understand how it works and, more importantly, how it can work for them.

“The total impact of AI … I don’t think anyone knows what it is,” said Longley, a manufacturing expert in residence for FORGE, a nonprofit with a mission to help innovators navigate the journey from prototype to commercialization and impact at scale. “It’s going to impact all industries with regard to manufacturing; they’re talking about the concept of ‘lights out factories,’ and it’s very realistic.”

Manufacturers will learn just how realistic that concept is and, more importantly, how they can learn how to put this technology to use at the first in a series of workshops on the broad subject of AI to be presented by BusinessWest, with a number of partnering organizations, including FORGE.

The series, called StratAI — its tagline is “Practical AI Strategies. Smarter Operations. Stronger Growth.” — begins on Thursday, March 26 from 4:30 to 7 p.m. at the Brian Corridan Center in the Technology Park at Springfield Technical Community College, and will feature pitches from those in the industry as well as breakout sessions, where participants can “get their hands dirty,” said Paul Silva of of Innovate413, another of the partners in this endeavor.

Paul Silva

Paul Silva

“Manufacturers, especially Western Mass. manufacturers, have had their hands so full dealing with the regular chaos of the economy that taking time for new technology has never been at the top of the priority stack, and understandably so.”

Future workshops — dates and locations to be determined — will address the impact and potential of AI in other sectors of the economy, including professional services such as law, accounting, and financial services; and the service sector, said Kate Campiti, associate publisher of BusinessWest, adding that the program was created to address what she called a “seismic force” in business.

“AI will impact every business, large and small, and in every sector,” she said. “It’s more than the proverbial ‘next big thing’ — it’s game-changing technology on many levels, and business owners need to understand the many ways it can impact them; help build efficiencies in repetitive, time-consuming tasks; and create time for planning and growth.

“StratAI was created to be educational, but also to give participants tools they can put to work the next day,” she noted, adding that, when it comes to AI, knowledge is power.

The manufacturing workshop will feature breakout sessions led by experts on manufacturing and AI technology, including:

• Ali Usman, founder and CEO of PixelEdge, which creates software to give businesses a competitive edge;

• David Arturi, president of TetraLabs, the company behind Tetra, an AI platform that helps manufacturers modernize company-wide operations and reduce downtime; and

• Ben Grande, president of the Western Mass. chapter of the National Tooling and Machining Assoc. and president of Meridian Industrial Group in Holyoke.

Usman told BusinessWest that his breakout session will focus on how companies can achieve return on investment in AI, and the many forms that ROI can take beyond cost savings on labor.

“It goes beyond simple head count,” he said, while acknowledging the importance of cutting labor costs, especially in manufacturing, and noting that ROI can and often does come from improved efficiency, streamlining processes, and letting AI handle simple tasks, thus allowing people to focus on more important matters.

For this issue, BusinessWest talked with some of its partners in this ambitious AI series about this revolutionary technology and what it means for businesses.

Making More History

Both Silva and Longley said there is some symmetry, if not poetry, to staging the manufacturing-focused AI workshop at the Technology Park, which sits on the grounds of the Springfield Armory.

Indeed, the Armory, built on a site chosen by George Washington, played a huge role in the emergence of the precision manufacturing sector in Western Mass. — and well beyond — and in manufacturing innovation itself.

Scott Longley

Scott Longley

“In order to survive, you’ve got to look at the situation and understand the potential and realize that you either get on board or get left behind.”

The assembly-line style of mass production was pioneered at the Armory by Thomas Blanchard, who invented a lathe that turned and finished gun barrels in a single operation. The Armory was also the site of Shays’ Rebellion, an unsuccessful attempt, led by Revolutionary War veteran Daniel Shays, to seize the arsenal’s weaponry and overthrow the government.

AI is revolutionary in many respects, Silva and Longley said, adding that, while it has been talked about seemingly without end for several years now, many manufacturers have yet to move on this front in a meaningful way — and for reasons that are in many ways easy to understand.

“Manufacturers, especially Western Mass. manufacturers, have had their hands so full dealing with the regular chaos of the economy that taking time for new technology has never been at the top of the priority stack, and understandably so,” Silva told BusinessWest. “It needs to be a conservative industry. You spend a lot of money for capital assets, so you can’t afford to really screw up; they have to be very careful.”

Meanwhile, technology is moving at an ever-faster pace, he went on, and it is increasingly difficult to stay on top of these advances, a situation that creates both risks and opportunities on a very large scale.

Indeed, with AI, companies will find they can no longer afford to be conservative and that ‘screwing up’ can take on new meanings and new dimensions with this technology and how quickly and effectively it is put to use.

“It’s tremendous chaos, and there’s going to be survivors, and then there’s going to be people who are left behind,” said Longley, adding that a thin line will likely separate the two groups. “And in order to survive, you’ve got to look at the situation and understand the potential and realize that you either get on board or get left behind.

About the Series:

What: StratAI: Practical AI Strategies. Smarter Operations. Stronger Growth.
Where: Brian Corridan Center, Technology Park at STCC
When: Thursday, March 26, 4:30 to 7 p.m.
Presented by: BusinessWest
Admission: Free
To Register: Go HERE

“It’s like getting on a plane; the plane is flying, but it’s a prop-driven plane,” he went on. “And you look out and see a Concorde or a space shuttle … you realize, ‘I better get on that one, or I’m gone.’ That’s what’s going to happen with AI, and it’s going to happen very fast.”

Attendees at the upcoming workshop will gain an appreciation for just how fast, while also getting an opportunity to hit the ground running, if you will, through a sampling of the technology and how it can be put to use.

“In some cases, attendees can walk in with a laptop and walk out with a piece of AI that can help them with their business the next day,” Silva said. “It’s not going to transform their business, it’s not going to double their profit margin, but people will be able to say, ‘in just one workshop, I came back with a taste of what this technology can do. Imagine if I spend more time; imagine if I get a couple of people at the company to really think about how this can be a lever we can push to get some modifications.’”

 

Learning Curves

When asked about the broad impact of AI in manufacturing, Longley said it comes on many levels, but especially the ability to lower the cost of production, which is a game changer for many players in this region and this country, where the costs of labor are higher.

As an example, he relayed the story of a Connecticut-based plastics manufacturer.

“They were competing against a plastics manufacturer in Asia, and what they did was buy a robotic arm, and using AI, they were able to automate their quality control,” he said. “They were able to use their robotic arm to accept certain pieces and segment certain pieces out. And then they were able to take those pieces and transfer them from one workstation to another, run them through the process, and then pull out the finished goods and get them ready for packaging.

Ben Grande

Ben Grande

“What they need to know is that, if they’re not looking into AI, they’re falling behind already.”

“That entire process was done [before] by people on their shop floor,” he went on. “They essentially created a work zone that was seamless, from the process of loading to finished goods to packaging, quality control … everything. And by doing that, they were almost able to reach cost parity with that Asian competitor. That’s a complete game changer when you’re able to do things like that.”

That’s just one example of how AI can help level the playing field and perhaps provide a competitive edge, he continued, adding that the upcoming StratAI workshop will provide insight into the many types of return on investment possible from AI, and how to maximize it.

Grande, like Silva and Longley, said most manufacturers have only recently started dabbling in AI — perhaps using ChatGPT to help write an email, for example. But they know they need to probe deeper.

“What they need to know is that, if they’re not looking into AI, they’re falling behind already,” he told BusinessWest, adding that the National Tooling and Machining Assoc. is working on a regional and national level to educate manufacturers on this subject, and BusinessWest’s series on the subject represents another important step in that process.

Usman agreed, adding that the focus moving forward should be on educating manufacturers on the many ways AI can benefit their operations.

“The indirect savings are sometimes overlooked by the industry,” he said, adding that AI can be used to improve safety and reduce the number of accidents, for example, and it can also be used to help capture the knowledge of retiring machinists — a huge issue for this industry.

“You can use AI to grab the knowledge that these people have and make the training much more effective,” Usman noted. “There are so many different ways to gather and use the information from these talented people, and once it’s been captured, that information can be converted more effectively into training programs.”

These are just some of the ways manufacturers can utilize AI and join the revolution, if you will, and the upcoming workshop, the first of several on this subject, will help bring these concepts to light.

Legislation Tackles ‘Responsible Use’ of Artificial Intelligence

By Contributor
Law

A Brave New Year

By Lauren C. Ostberg, Esq. and Michael McAndrew, Esq.

 

Artificial intelligence — specifically, natural-language chatbots like ChatGPT, Bard, and Watson — have been making headlines over the past year, whether it’s college writing teachers’ attempts to avoid reading machine-generated essays, the boardroom drama of OpenAI, the SAG-AFTRA strike, or existential anxiety about the singularity.

On the frivolous end of the spectrum, one of the authors of this piece used ChatGPT to find celebrity lookalikes for various attorneys at their firm, and learned that ChatGPT defaults to the assumption that, irrespective of race or gender or facial features, most people (including Lauren Ostberg) look like Ryan Reynolds. On the more serious end, the legislatures of state governments, including those in Massachusetts and Connecticut, have labored over bills that will harness, regulate, and investigate the power of AI.

Lauren Ostberg

“The legislatures of state governments, including those in Massachusetts and Connecticut, have labored over bills that will harness, regulate, and investigate the power of AI.”

In Massachusetts, for example, the Legislature is considering two bills, one (H.1873) “To Prevent Dystopian Work Environments,” and another (S.31) titled “An Act Drafted with the Help of ChatGPT to Regulate Generate Artificial Intelligence Models Like ChatGPT.” The former would require employers using any automatic decision-making system to disclose the use of such systems to their employees, and give employees the opportunity to review and correct the worker data on which those systems relied. The latter, sponsored by Hampden County’s state Sen. Adam Gomez, aims to regulate newly spawned AI models.

While the use of AI to draft S.31 is, in its own right, an interesting real-world application of AI, the use of AI in this way is not the only important part of S.31, which proposes a regulatory regime whereby “large-scale generative artificial intelligence models” are required to register with the attorney general. In doing so, AI companies would be required to disclose detailed information to the attorney general, including “a description of the large-scale generative artificial intelligence model, including its capacity, training data, intended use, design process, and methodologies.”

In addition to requiring the registration of AI companies, S.31 (if passed) would also require AI companies to implement standards to prevent plagiarism and protect information of individually identifiable information used as part of the training data. AI companies must “obtain informed consent” before using the data of individuals. To ensure compliance, the bill gives the AG enforcement powers and grants it the authority to propound regulations that are consistent with the bill.

While S.31 provides robust protections against using data garnered from citizens of the Commonwealth in programming AI models, it may fail because of the amount of disclosure required from AI companies. As part of a new and fast-moving field, AI companies may be hesitant to disclose their processes, as is required by S.31.

Michael McAndrew

Michael McAndrew

“This proposed legislation is, of course, just the beginning of government’s attempts to grapple with the ‘responsible use’ (an Orwellian term, if ever there was one) of AI and technology.”

Though commendable in its effort to protect creators and citizens, S.31 may ultimately drive AI-based businesses out of the Commonwealth if they fear that their competitively sensitive AI processes will be disclosed as part of the public registry envisioned by S.31. However, the structure of the proposed registry of AI businesses is currently unclear; only time will tell how much information will be available to the public. Time will also tell if S.31 (or H.1873, referenced above) makes it out of committee and into law.

Meanwhile, in Connecticut

This past June, Connecticut passed a law, SB-1103, that recognizes the dystopian nature of the government using AI to make decisions about the treatment of its citizens. It requires that — by, on or before Dec. 31, 2023 — Connecticut’s executive and judicial branches conduct and make available “an inventory of all their systems that employ artificial intelligence.” (That is, it asks the machinery of the state to reveal itself, in part.)

By Feb. 1, 2024, the executive and judicial branches must also conduct (and publicly disclose) an “impact assessment” to ensure that systems using AI “will not result in unlawful discrimination or a disparate impact against specified individuals.” ChatGPT’s presumption, noted above, that every person is a symmetrically faced white man would be much more serious in the context of an automated decision-making system that impacts the property, liberty, and quality of life of Connecticut residents.

This proposed legislation is, of course, just the beginning of government’s attempts to grapple with the ‘responsible use’ (an Orwellian term, if ever there was one) of AI and technology. Massachusetts has proposed the creation of a commission to address the executive branch’s use of automated decision making; Connecticut’s new law has mandated a working group to consider an ‘AI Bill of Rights’ modeled after a federal blueprint for the same. The results — and the inventory, and the assessments — remain to be seen in the new year.

 

Lauren C. Ostberg is a partner, and Michael McAndrew an associate, at Bulkley Richardson, the largest law firm in Western Mass. Ostberg, a key member of the firm’s intellectual property and technology group, co-chairs the firm’s cybersecurity practice. McAndrew is a commercial litigator who seeks to understand the implications and risks of businesses adopting AI.

AI Promises to Impact the Workforce in Unexpected Ways

By
Cover Story Cybersecurity

Rise of the Machines

 

Twice a year, Tom Loper participates in a Cybersecurity Advisory Council meeting. The last one was … different.

“I would say there was a sense of concern that I hadn’t seen before at that council because of ChatGPT and the phishing potential,” said Loper, dean of the School of Arts, Sciences and Management at Bay Path University.

He explained that people can use ChatGPT, the AI chatbot that has drawn major worldwide attention since its unveiling last fall, to input information from any website, or emails from an organization, to generate a phishing episode much more realistic, and much more likely to draw a response, than its target had ever received.

“These are people — from Facebook, from Fidelity, from the Hartford, from every major organization you can think of in our area and beyond — who were taken aback by the capabilities of ChatGPT,” Loper said.

“It really scares the hell out of all of us, because we know the biggest problem that we have in cybersecurity, the biggest challenge, comes between the brain and the keyboard. Human beings allow people in.”

“It really scares the hell out of all of us, because we know the biggest problem that we have in cybersecurity, the biggest challenge, comes between the brain and the keyboard,” he explained. “Human beings allow people in. The systems are very good at stopping people from breaching — flags go off, bells and whistles go off. But the biggest problem we have is the human intervention that has to take place. And human beings make mistakes. Especially when we’re connected to the outside world, we make mistakes that allow phishing to take place.”

Tom Loper says ChatGPT is already making work easier

Tom Loper says ChatGPT is already making work easier for students and professionals, but that raises issues ranging from plagiarism to how jobs might change.

And ChatGPT just made that challenge even more daunting.

But the impact of this and other AI tools extend far beyond cyberthreats.

“AI has the ability to be as impactful as the internet — possibly even as impactful as electricity — on the way business is conducted,” said Delcie Bean, president and CEO of Paragus Strategic IT in Hadley. “We all knew this day was coming for a long time, but now it’s here, and by the end of this decade, the only businesses that will still be in business are the ones that embrace the change.”

Bean explained that these tools allow enormous amounts of work previously done by humans to be completely automated, often in a fraction of the time and with much greater accuracy — and not just basic administrative work.

“We are also talking about highly complex work like computer coding, law, and even practicing medicine,” Bean related. “In a recent demonstration, AI correctly diagnosed 225 cancer cases within 18 minutes and at 85% accuracy, while human doctors took 50 minutes and only achieved a 64% accuracy rate with the same cases. Between now and the end of the decade, we are going to see dozens of new companies and technologies emerging, displacing a lot of legacy processes and technologies at a rapid pace.”

What does that mean for employers, the workforce, and job opportunities in the future? No one has all the answers to that question — although ChatGPT itself took a stab at it for us  — but there is broad agreement that change is coming.

“AI has the ability to be as impactful as the internet — possibly even as impactful as electricity — on the way business is conducted. We all knew this day was coming for a long time, but now it’s here, and by the end of this decade, the only businesses that will still be in business are the ones that embrace the change.”

“This really challenges all forms of expertise because it’s drawing on this incredible domain of knowledge,” said James Wilson, professor of Business at Bay Path. “Now, the accuracy of it, the citing of it, all that is not there yet. But it will come.”

Wilson recently started teaching courses in a certificate program on digital transformation, which includes discussion of the impact of AI on the workplace.

“It started as a therapy session because the students were like, ‘what’s the future going to be? What skills do I need to have? What’s going to happen?’ It’s very uncertain. We have these things called human skills … which are presumably going to differentiate us from this artificial intelligence — that is, creative thinking, inquiry, critical thinking, collaboration. You’re not going to run your business on ChatGPT.”

Delcie Bean says AI promises to disrupt

Delcie Bean says AI promises to disrupt not only administrative and computer careers, but law, medicine, and a wide range of other fields.

But that’s not the only viewpoint. “The most pessimistic view of this is that AI will do for humans what the automobile did for horses,” Wilson said. “There are some dire projections.”

 

Future … Tense

Loper and Wilson have delved into the capabilities and possibilities of ChatGPT and other AI tools on the higher-education level, and they’ve been impressed.

“ChatGPT is the hot topic because it’s a breakthrough in the way it uses large language processing,” Loper said. “It’s never been made available to the public like this before. The exciting part is how it processes data at a phenomenal speed — it’s absolutely amazing.”

And it’s not just regurgitating knowledge, he stressed. Xiaoxia Liu, assistant professor and director of Applied Data Science at Bay Path, has been using ChatGPT in her classes, helping students finish programming projects.

A Brief ‘Interview’ with ChatGPT

We went right to the source and asked ChatGPT for its take on this article’s topic. These are the answers it provided within seconds.

How will ChatGPT and other AI tools threaten the job market in the coming years?

AI tools and automation have already impacted the job market in many ways, and it is likely that this trend will continue in the coming years. ChatGPT and other AI tools can automate repetitive or low-level tasks, leading to job displacement for those whose work can be automated.

However, it’s essential to note that AI tools and automation can also create new job opportunities, particularly in areas that require specialized skills or expertise in implementing and managing AI technology. Additionally, the use of AI tools can increase productivity and reduce costs, which can result in businesses expanding and creating new job positions.

Overall, the impact of AI on the job market is complex and multi-faceted. While some jobs may be replaced by automation, new opportunities may arise, and existing roles may evolve and require different skill sets. It is essential for individuals and businesses to adapt to these changes by acquiring new skills and embracing the opportunities presented by AI.

What are some jobs that ChatGPT and other AI tools will impact the most?

ChatGPT and other AI tools are likely to impact a range of jobs, particularly those that involve repetitive or low-level tasks that can be automated. Some examples of jobs that may be impacted the most include:

• Customer-service representatives: ChatGPT can automate many customer service tasks, such as answering common questions or directing customers to the appropriate department.

• Data-entry clerks: AI tools can be used to scan and input data, reducing the need for manual data-entry clerks.

• Factory workers: AI-powered robots can perform tasks such as assembly-line work, reducing the need for human workers.

• Drivers: The use of self-driving cars and trucks may impact the job market for drivers in the coming years.

• Financial analysts: AI tools can analyze financial data and identify patterns, potentially reducing the need for human financial analysts.

• Retail salespeople: The rise of e-commerce and automated checkout systems may reduce the need for human retail salespeople.

• Administrative assistants: AI tools can be used to automate tasks such as scheduling appointments, managing email, and organizing files, reducing the need for human administrative assistants.

It’s important to note that the impact of AI on these jobs may vary depending on the industry, location, and other factors. While AI may automate some tasks, it may also create new job opportunities in areas such as data analysis, AI development and maintenance, and other specialized roles.

Write a haiku about how AI might change the way people work.

Machines learn and grow.
Work becomes more efficient.
Humans thrive with ease.

“She gives them a start, and then they have to finish it; they use Python or whatever to finish it,” Loper explained. “Now, she’s letting them use ChatGPT, and they’re finishing it in seconds. And it’s very accurate, very fast. She’s excited about that. That’s an example where ChatGPT uses large language learning to help it finish something that you started without you giving it much guidance at all, other than the start of the program.”

Loper noted that ChatGPT also gives different answers to questions based on who’s asking and in what way.

“The algorithm, for whatever reason, is drawing on what it thinks is ideal, but your past references influence the way that it searches. The type of question you ask generates a certain type of format and answer. So if you’re asking a business question, you get an answer in a business format. If you’re asking a question for a literary magazine, you get a different format.”

And that raises issues with academic plagiarism, Loper noted, because professors can no longer throw a chunk of a student’s work into Google to get a definite take on whether something was lifted, verbatim, from another source.

He has experimented with generating presentations from ChatGPT based on a series of prompts, and recognizes the ramifications for students. “It was logically laid out and put in a format that, if a student gave it to me, I would say, ‘damn, that’s good. You really learned this material.’”

When it comes to cracking down on plagiarism, Wilson added, “we might have to abandon ship on that in a way, because it’s not so much about being original anymore as being creative in your inquiry and critical in your understanding of it.”

Wilson called up other AI tools as well during his talk with BusinessWest, from Butternut AI, which can build a website in 20 seconds, to Pictory AI, which generates videos, to Wondercraft AI, which asks for discussion prompts and will generate a full podcast, featuring multiple voices.

“I teach a business-analytics class, where it was all research, research, research. I don’t think it’s about research anymore,” he said of the way AI will affect academia. “I think it’s about asking the right questions. It’s about the right inquiry. It may not be about writing anymore. It may be about editing and getting a draft from the AI expert and then adjusting it. The amount of content that can be created is staggering.”

Even classroom lectures can benefit, he added. “I can put in a few prompts, and it generates an entire lecture. I can go in and change the text, which will then be re-narrated through AI. Suddenly, all my content is better organized.”

Amid all these implications is the compelling idea that AI will only get sharper.

James Wilson

James Wilson

“We’ve all gotten used to Siri, and we’ve all gotten used to Google, but now you’re going to have this super-intelligent, conversational assistant with you,” Wilson said.

Loper added that these discussions are no longer theoretical. He noted that speakers at the Davos World Economic Forum, among others, have been thinking seriously about what types of work are going to be replaced by artificial intelligence and what careers will continue to be dominated by human beings, with their unique sensing and critical skills.

“Human beings aren’t going away any time soon, but we’re going to have a level of augmentation that we’ve never experienced, and we don’t know how to work with it yet. It’s so new,” he added. “James and I are playing with ChatGPT, and we’re kind of in awe of it, but we’re just skimming the surface compared to some of the ways people are using it. It’s just amazing.”

Added Wilson, “if you try to imagine this in a much smaller sense, it’s like when the smartphone came out — how did that change business? Texting and emailing and video chat reconfigured the way things are done, but in a smaller sense.”

Loper agreed. “This is much bigger than anything like that.”

 

Risk and Reward

Przemyslaw Grabowicz, a computer scientist in the College of Information and Computer Science at UMass Amherst, is heading up a research initiative called EQUATE (which stands for equity, accountability, trust, and explainability), which is currently developing a coordinated response to the Biden administration’s request for public comment on its AI Accountability Policy.

“As a computer scientist, I believe technology can make our lives better, maybe in some senses easier,” he told BusinessWest. “But I think there’s a risk that, if we step into new technologies too quickly, then society may develop a distrust for new technology that may, in the end, slow down developments.”

The National Telecommunications and Information Administration (NTIA), a Commerce Department agency that advises the White House on telecommunications and information policy, is studying whether there are measures that could be implemented assure that AI systems are “legal, effective, ethical, safe, and otherwise trustworthy.”

“Responsible AI systems could bring enormous benefits, but only if we address their potential consequences and harms,” NTIA Administrator Alan Davidson told Reuters. “For these systems to reach their full potential, companies and consumers need to be able to trust them.”

In crafting accountability policies, Grabowicz said, leaders in all areas of life need to think carefully about the consequences of technology development and ways in which profits from this development will be converted into long-term societal gain rather than short-term profits. If not, such technology may contribute to the growth of misinformation and polarization.

“As a society, nobody wants these kinds of consequences, but if corporations focus on short-term financial gain, they may not consider the potential harmful consequences of technology being used in a way that it wasn’t meant to when it was developed.”

Such questions, Bean noted, will be further accelerated by advances in other technologies, especially robotics. “We are rapidly approaching the day when there will be free-standing robots in our lives who are able to think, make decisions, and interact with the world around them.”

In terms of security, he went on, it is hard to quantify the threat. “With Microsoft’s new tool VALL-E, which can mimic a human voice with a sample size as small as three seconds; deepfakes being able to be produced in minutes by anyone with basic computer skills; and more and more data being available to be mined, we are going to need to rethink security.

“While it is possible to imagine how technology will respond to meet these threats, the risk to businesses is the gap that exists in between the threats coming online and the response being available and adopted,” he added. “A lot of businesses are likely to face real threats in that gap — not to mention physical security, things like hacking a moving vehicle or sending a robot to conduct a robbery.”

In short, Bean said, “while there is much to look forward to, there are certainly many threats that will need to be understood and addressed.”

Meanwhile, artificial intelligence continues to evolve — in ways we may not even see coming.