The fear of AI

Fear-mongering about Artificial Intelligence has become commonplace as AI adoption has spread. In mid-February, there was a storm when an …

Devangshu Datta

Fear-mongering about Artificial Intelligence has become commonplace as AI adoption has spread. In mid-February, there was a storm when an open-source AI developer postponed putting one of its products into public domain due to concerns of misuse.

OpenAI is a San-Francisco based non-profit organisation with a hundred-person team and funding from billionaires Vinod Khosla, Elon Musk, Peter Thiel, etc. Its mission is to “ensure that Artificial General Intelligence (AGI) benefits all of humanity”, as and when AGI arrives. The OpenAI definition of AGI is “highly …

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‘Devastating’: Robots to take 6.5 million jobs

Microsoft Australia managing director Steven Worrall and Telstra executive Michael Ebeid warn that business, governments and workers are woefully …

Microsoft Australia managing director Steven Worrall sees cause for concern.Phil Carrick

“The lack of urgency in implementing training plans to help people acquire the necessary skills to succeed in an AI-enabled world creates some cause for concern,” Microsoft’s Mr Worrall said.

The tech giant found a lack of skills and resources as well as a failure in leadership, were the key barriers to acting.

Their global survey and interviews with 1,600 business leaders and 1,500 workers found 30 per cent of workers don’t believe AI will have any impact on their jobs, compared to 11 per cent of business leaders.

“I don’t think the community have yet hit a tipping point where they have seen enough examples to really understand what we are talking about,” said Mr Worrall, who argues AI doesn’t mean whole jobs will necessarily be wiped out.

“If I’m a research scientist working for Northern Territory Fisheries, I am now using AI to speed up my job, so that instead of spending hours looking at video footage, AI technology delivers outcomes to me.”

“Or I work at Downer and manage the train network so instead of having my team spending hours analysing reports, I have an AI system with 30,000 inputs every ten minutes to help me make better decisions about maintenance cycles,” he said.

Telstra flagged similar concerns in their recent research which found one-third of Australian organisations have barely begun their digital transformation journey, well behind global peers.

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Telstra Executive Michael Ebeid says Australia is lagging other countries.James Brickwood

“Australian companies are lagging global businesses in transforming and we need to really get Australian companies to start thinking about the future, otherwise we will find many companies will be left behind,” Telstra head of Enterprise Michael Ebeid said.

The McKinsey report warns that the retail industry will be the worst hit but also predicts a net gain in jobs by 2030.

Government, administrative support, transport and warehousing are also among those sectors expected to be worst off.

Co-author of the McKinsey report Seckin Ungur said the worst response is to think “the robots are coming and stick our heads in the sand”.

“The debate seems to be the robots are coming and they are going to take our jobs, this is a bad thing ‘how do we slow it down?’ but it is inevitable. If you slow it down you are only slowing down your ability to adapt and be more competitive to get those new jobs,” she said.

“Workers still think as automation as something that won’t happen to me, as something which hit factory workers but they don’t realise this new wave of automation is hitting all sectors and levels in almost every job, including white collar workers like accountants and legal clerks.”

Ms Ungur is moderating a panel on the topic with CEDA CEO Melinda Cilento and Deakin vice-chancellor Jane den Hollander at the Creative Innovation conference in Melbourne from Monday which also features David Gonski, Alan Finkel and Lord Adair Turner.

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Opendoor raises $300M on a $3.8B valuation for its home marketplace

… Access Technology Ventures, Lennar Corporation, Fifth Wall Ventures, SV Angel, Norwest Venture Partners, NEA, GGV Capital, Khosla Ventures, …

Last month, we reported that Opendoor — the startup that is taking on the real estate industry with its own platform for buying up homes and selling them on to interested buyers — filed to raise $200 million on a $3.7 billion valuation. Now, we can confirm that the round has closed, and it has turned out to be higher on both counts: The company has raised $300 million, and sources close to it tell TechCrunch that the valuation is now at $3.8 billion.

This latest round included previous investor General Atlantic, with participation from Hawk Equity, the SoftBank Vision Fund, Access Technology Ventures, Lennar Corporation, Fifth Wall Ventures, SV Angel, Norwest Venture Partners, NEA, GGV Capital, Khosla Ventures and GV, along with other, unnamed investors.

Opendoor has now raised $1.3 billion in equity, with some $3.0 billion in debt financing for buying properties.

Opendoor’s funding underscores a couple of big themes. The first is the “safe as houses” maxim. That is to say, the housing market — despite some huge dips resulting either from wider economic tides, or simply scandalous mismanagement around, for example, sub-prime lending — continues to be a major draw not just for investors but also consumers.

“Our business is designed to operate in up markets, down markets and flat markets,” co-founder and CEO Eric Wu said in an email to TechCrunch. “During a slowdown, it becomes increasingly more painful to sell a home, which impacts mobility for homeowners and increases the need for reliable home sales through products like Opendoor. It is our responsibility to manage that risk and charge the proper fees to account for the volatility.” The company says that in 2018, more than 800,000 people toured Opendoor homes.

And that leads to the second theme this funding touches on: the disruption of the business model for buying and selling homes.

That process has largely remained unchanged for decades, but Opendoor is part of (and arguably leading) a new guard of startups that is trying to shake that up. In Opendoor’s case, it’s doing so by creating data modelling that lets it spot opportunities and gaps in the market for homes, as well as optimal pricing for properties, which helps the company mitigate some of the risk associated with taking assets on to its own books with the understanding that it will be able to offload them in a predictable way.

“The company has not been around during a national housing recession,” admitted Anton Levy, the MD of General Atlantic, in an interview, “but it is preparing day in day out for if and when it happens, and believes it will be well equipped if it does.”

That includes, he added, data sets of housing and other economic indicators from the last five or six recessions. “That means if and when it happens, the pricing models will adjust accordingly.”

There are signs that over time, those algorithms have been getting more efficient. Eric Wu, who co-founded the company with Ian Wong, Justin Ross and Keith Rabois, told TechCrunch that the average time a home is now held on its books is 90 days, versus 140 in 2015.

Wu said this latest round of funding will be used both for product development as well as to continue expanding to more markets in North America.

On the product side, the company wants to continue making pricing more accurate (not just for selling but for buying homes at competitive rates). Another focus will be continuing to bring down the time it takes to convert interested sellers into actual sellers, and likewise with buyers. This will include integrating more services like mortgage tools — including title and escrow — as well as other service providers and contractors, who might be needed by buyers to help consider the work that would need to be done once the home is purchased.

(If you’ve ever bought a home, you will know that access to estimates and work commitments from contractors and others can be essential to comprehending the “true cost” of home purchase, as post-purchase work can sometimes be a massive and costly effort.)

Wu said that for now, the plan will be to focus all of this around the private home-buying experience, rather than move into using the Opendoor platform to tackle the selling and buying of other large assets such as commercial real estate, cars or loans. “These capabilities lend themselves well to rental/residential income,” he noted, “but that is currently not on our roadmap.”

There are a number of competitors to Opendoor, including not only incumbent channels that involve traditional agents, but others like Compass also trying to change up the old way of doing things, and Knock, which is following a model similar to Opendoor’s. Levy believes that the horse his firm has bet on, however, is the “clear leader.”

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TradeIX to create 70 jobs in Dublin expansion

Financial technology company TradeIX has announced the creation of 70 new jobs as its expands its global headquarters in Dublin. The new jobs are …

Financial technology company TradeIX has announced the creation of 70 new jobs as its expands its global headquarters in Dublin.

The new jobs are across engineering, sales, customer service, and product development.

Founded in 2016, the company’s clients include ING, BNP Paribas, DHL, AIG, Oracle, and many other Fortune 500 companies from various industries.

The company is supported by IDA Ireland.

It also has offices in London, Kettering and Singapore and operations in Germany and the US.

“TradeIX established its global headquarters in Dublin with over 35% of its workforce based in the Irish capital,” its founder and CEO Robert Barnes said.

“We are building the world’s first distributed trade finance platform powered by Corda blockchain technology, and the Irish operation plays a pivotal role in developing and scaling the company’ solutions”, he added.

“Ireland’s global reputation as a blockchain centre of excellence, attracting international companies to make use of Ireland’s well-developed technological and research sectors, is strengthened by TradeIX’s decision to expand in Dublin,” said IDA Ireland’s chief executive Martin Shanahan.

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OpenAI’s Mission to Benefit Humanity Now Includes Seeking Profit

SpaceX and Tesla CEO Elon Musk, startup accelerator Y Combinator president Sam Altman, and several other Silicon Valley figures launched OpenAI …

OpenAI, an artificial intelligence research group created by Silicon Valley investors as a non-profit, will now be seeking “capped” profit, according to a blog post on the OpenAI website published Monday.

SpaceX and Tesla CEO Elon Musk, startup accelerator Y Combinator president Sam Altman, and several other Silicon Valley figures launched OpenAI in late 2015 with $1 billion in seed funding and the stated goal of ensuring that AI “benefits all of humanity.” Musk stepped down from OpenAI in February 2018. Since its founding, the group has conducted research with reinforcement learning, robotics, and language.

According to OpenAI, the original nonprofit entity will own a limited partnership called OpenAI LP that’s designed to give a “capped return” to investors and employees and funnel excess funds back to the nonprofit. It’s unclear exactly how OpenAI’s technologies will generate the value needed to provide these returns, but the blog notes that OpenAI is flexible enough to allow for a return “in the long term.”

“The fundamental idea of OpenAI LP is that investors and employees can get a capped return if we succeed at our mission, which allows us to raise investment capital and attract employees with startup-like equity,” the blog post reads.

OpenAI’s blog claims that returns for the first round of investors will be capped at 100 times their original investment, and returns to employees will be “negotiated in advance.”

Wired reported that the shift toward seeking a “capped profit” was an effort to compete with other corporate groups in AI research, like Google DeepMind. OpenAI is now an entity that exists in part to enrich venture capitalist investors, with extremely modest financial “caps.”

OpenAI’s shift toward seeking profit in order to both woo and remunerate investors isn’t surprising, considering the venture capitalist resumes of Musk, Altman, Peter Theil, and others who helped get OpenAI off the ground.

Altman’s venture capital seed funding company Y Recombinator has invested in over 1,400 for-profit companies, including Reddit, Airbnb, Dropbox, and Stripe. Musk has poured billions of his own money into his companies SpaceX and Tesla. Thiel, a Trump-supporter, has funded Silicon Valley companies SpaceX and Airbnb, and is a principal investor in Palantir, a data-mining company used by US banks and police departments to create a “digital dragnet” of individuals designed to track and potentially incriminate them. Musk and Thiel co-founded PayPal, and OpenAI backer Reid Hoffman was a PayPal executive before co-founding LinkedIn.

OpenAI claims that its shift to a capped profit structure is specifically designed on nurturing the development of “safe” artificial general intelligence (AGI)—or, human-like intelligence. The blog states, “Our structure gives us flexibility for how to create a return in the long term, but we hope to figure that out only once we’ve created safe AGI.”

Experts have argued that the concept of AGI is based on false or unprovable assumptions about the nature of intelligence, and is a conceptual myth. It’s also worth noting that “artificial intelligence” is often appropriated by startups to elicit hype. In many cases, “AI” is used as a buzzword for standard computer programming. According to a recent survey from London venture capital firm MMC, 40 percent of European startups who are classified as “AI companies” do not even use AI. While OpenAI is working with real AI as the term is commonly understood, the hype about AI will likely play into their financial interests.

OpenAI has some incremental wins under its belt, but also hasn’t accomplished any paradigm-shifting breakthroughs in AI research. In July 2018, OpenAI claimed that its Dactyl robot-hand system achieved dexterity and flexibility was nearly but not quite comparable to that of a human hand. In August, OpenAI built neural networks that can beat humans at the game Dota 2by basically cheating.

It’s not clear exactly how or if OpenAI’s “capped profit” structure will change things on a day-to-day level for researchers at the entity. But generally, we’ve never been able to rely on venture capitalists to better humanity.

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