Navigating the AI Gold Rush: Skins, Security, and the Real Value Proposition

 The economic battle surrounding artificial intelligence is intensifying at an unprecedented pace. Major AI players like OpenAI, Google, Meta, and Anthropic are leading this technological revolution. Tech giants such as Microsoft, Amazon, and Apple, along with thousands of startups, are vying for a stake in this burgeoning market without being able to develop their own competitive models. Amidst this frenzy, a critical question arises: what exactly is being sold?

Two primary value propositions have emerged in this landscape: skins and security mongers. Skins are interfaces or applications that overlay major AI models, aiming to simplify user interaction. They cater to individuals lacking advanced prompting skills, offering a more user-friendly experience. Security mongers, on the other hand, emphasize heightened privacy and security, often exaggerating potential risks to entice users.

While both propositions seem valuable on the surface, a deeper examination reveals significant shortcomings. Skins promise to streamline interactions with AI models by providing preset prompts or simplified interfaces. For instance, a startup might offer a chatbot specialized in drafting business emails, claiming it saves users the hassle of formulating prompts themselves. However, is this convenience truly worth it?

Major AI models are increasingly user-friendly. ChatGPT, for example, has an intuitive interface that caters to both novices and experts. Users often find they can achieve the same or better results without intermediary platforms. Additionally, skins often come with subscription fees or hidden costs, meaning users are essentially paying extra for a service the primary AI model already provides. There is also the issue of limited functionality; skins may restrict access to the full capabilities of the AI model, offering a narrow set of functions that might not meet all user needs.

The second proposition taps into growing concerns over data privacy and security. Vendors claim to offer AI solutions with superior security measures, assuring users their data is safer compared to using mainstream models directly. But does this claim hold up under scrutiny?

Most of these intermediaries still rely on API connections to major AI models like ChatGPT. Your data passes through their servers before reaching the AI model, effectively adding another point of vulnerability. Introducing additional servers and transactions inherently increases the risk of data breaches. More touchpoints mean more opportunities for data to be intercepted or mishandled. Furthermore, major AI providers invest heavily in security and compliance, adhering to stringent international standards. Smaller vendors may lack the resources to match these safeguards.

For example, a startup might advertise an AI-powered financial advisor with enhanced security features. However, if they are routing data through their servers to access a model like GPT-4, your sensitive financial data is exposed to additional risk without any tangible security benefit. The promise of enhanced security becomes questionable when the underlying infrastructure depends on the same major models.

AI platforms have not introduced new risks to privacy or security beyond what exists with other online services like banks or credit bureaus. They employ advanced encryption and security protocols to protect user data. While no system is infallible, major AI models are on par with, if not superior to, other industries in terms of security measures. They use end-to-end encryption to protect data in transit and at rest, implement strict authentication measures to prevent unauthorized access, and conduct regular security assessments to identify and mitigate vulnerabilities. It is easy to opt out of providing your data to train new models. It is much more difficult to know what your vendors are going to do with your data.

In a market flooded with AI offerings, it is crucial to approach vendors' claims with a healthy dose of skepticism. Validate the functionality by testing whether the convenience offered by skins genuinely enhances your experience or merely repackages what is already available. Assess the security measures by inquiring about the specific protocols in place and how they differ from those used by major AI providers. Transparency is key; reputable vendors should be open about how your data is used, stored, and protected.

As the AI gold rush continues, distinguishing between genuine innovation and superficial value propositions becomes essential. Skins and security mongers may offer appealing pitches, but often they add little to no value while potentially increasing costs and risks. It is wise to try using major AI models directly before opting for third-party solutions. Research the backgrounds of vendors to determine their credibility and reliability. Seek reviews and testimonials from other users to gauge the actual benefits and drawbacks.

In the end, the most powerful tool at your disposal is due diligence. By critically evaluating what is being sold, you can make informed decisions that truly benefit you in the rapidly evolving world of AI. Beware of vendors selling either convenience or security without substantial evidence of their value. At the very least, take the time to validate their claims before making an investment.

 

The Stealth AI Adoption

In modern workplaces, a quiet trend is taking hold: employees are secretly adopting artificial intelligence tools to enhance their work. Whether it is writing, designing, coding, or creating content, many are leveraging AI without informing their bosses. This “stealth AI adoption” is likely more widespread than managers realize.

Consider Alex, a software developer at a bustling tech firm. To streamline his coding process, Alex uses an AI assistant that can generate snippets of code in seconds. This tool not only saves him hours each week but also allows him to tackle more complex projects. However, Alex keeps this AI helper under wraps. Why? He has two choices: use the extra time for personal activities or take on additional work to appear more productive than his peers. There is no actual incentive to admit the use of AI. In some shops, cybersecurity people will come after you, if you confess. 

This hidden use of AI offers clear benefits for employees. Saving a few hours each week is tempting, whether for personal pursuits or to discreetly boost one’s workload. As a result, many organizations might be underestimating how extensively AI is being integrated into daily tasks.

Productivity can be measured in two ways: doing the same work with fewer people or doing more with the same number. The latter is a healthier, more sustainable approach. To achieve true success, organizations should aim to do more with their existing workforce rather than cutting staff. However, the stealth adoption of AI complicates this goal.

When employees use AI tools without disclosure, organizations miss out on opportunities to harness these technologies strategically. Without knowing how AI is being utilized, companies can not provide proper training or integrate AI into their workflows effectively. This fragmented approach can lead to missed efficiency gains and a lack of cohesive progress.

To foster a productive and innovative environment, companies need to build trust with their employees. Here is how:

1. Reassure Employees: Let your team know that adopting AI will not lead to layoffs. Emphasize that AI is a tool to help them do their jobs better, not a replacement for their roles. In unionized environments, a conversation with labor leaders would be wise. 

2. Create Incentives for Disclosure: Encourage employees to share the AI tools they are using by offering rewards or recognition. This transparency can help management understand how AI is being integrated and identify best practices.

3. Do More with the Same People: Focus on expanding the scope of work and fostering innovation rather than cutting positions. This approach not only boosts morale but also drives the organization forward.

By building trust and creating a supportive environment, organizations can turn stealth AI adoption into a strategic advantage. Employees will feel comfortable sharing their AI discoveries, allowing organizations to implement these tools effectively and sustainably.

As we move further into the AI-driven era, organizations must address this hidden trend. Encouraging transparency about AI tools and developing clear strategies for their use can ensure that productivity gains are real and sustainable. Until then, the silent spread of AI will keep reshaping workplaces, one undisclosed tool at a time. 

Why Newsom should veto SB 1047

The Safe and Secure Innovation for Frontier Artificial Intelligence Models Act (SB 1047) might appear as a forward-thinking approach to regulating AI, but it overlooks a crucial reality: we lack the infrastructure to implement its provisions effectively. While some companies will inevitably claim they can audit AI systems and evaluate safety protocols, their motivations will often be driven by profit rather than genuine expertise.

Moreover, the burdens imposed by this bill will disproportionately affect smaller developers, particularly those on college campuses or within startups, who simply cannot afford the additional costs. This will stifle innovation, further entrenching the dominance of large tech companies and discouraging new entrants from participating in the AI landscape.

Before implementing such heavy-handed regulations, California must first focus on developing clear standards and building the capacity to enforce them. Without this groundwork, the bill will do more harm than good, leading to increased monopolization and a chilling effect on the very innovation it seeks to protect. The Governor should veto this bill and advocate for a more measured, phased approach that prioritizes the development of standards and capacity before regulation.

Filling Voids, Not Replacing Human Experts

The debate over artificial intelligence replacing human experts often centers on a binary question: Can AI do a better job than a human? This framing is understandable but overly simplistic. The reality is that in many contexts, the competition is not between AI and people—it is between AI and nothing at all. When viewed through this lens, the value of AI becomes clearer. It is not about pitting machines against human expertise; it is about addressing the voids left by a lack of available service.

Consider healthcare, particularly in underserved areas. It is a truism that a qualified doctor’s advice is better than anything an AI could provide. But what if you live in a rural village where the nearest doctor is hundreds of miles away? Or in a developing country where medical professionals are stretched thin? Suddenly, the prospect of AI-driven medical advice does not seem like a compromise; it feels like a lifeline. While AI lacks the nuanced judgment of an experienced physician, it can provide basic diagnostics, suggest treatments, or alert patients to symptoms that warrant urgent attention. In such scenarios, AI does not replace a doctor—it replaces the silence of inaccessibility with something, however imperfect.

Another case in point is mental health counseling. In many parts of the world, even in affluent countries, mental health services are woefully inadequate. Students at universities often face wait times ranging from weeks to months just to speak with a counselor. During that limbo, the option to interact with an AI, even one with obvious limitations, can be a critical stopgap. It is not about AI outperforming a trained therapist but offering a form of support when no other is available. It can provide coping strategies, lend a sympathetic ear, or guide someone to emergency services. Here, AI does not replace therapy; it provides something valuable in the absence of timely human support.

Education offers another case for AI’s gap-filling potential. Tutoring is an essential resource, but access to quality tutors is often limited, mainly because it is expensive. Universities might offer tutoring services, but they are frequently understaffed or employ peer tutors. Office hours with professors or teaching assistants can be similarly constrained. AI can step into this void. Chatting with an AI about a difficult concept or problem set might not equal the depth of understanding gained from a one-on-one session with a human tutor, but it is unquestionably better than struggling alone. AI does not compete with tutors; it extends their reach into spaces they cannot physically or temporally cover.

The same logic applies to a range of other fields. Legal advice, financial planning, career coaching—all are areas where AI has the potential to add significant value, not by outstripping human expertise but by offering something in environments where professional advice is out of reach. Imagine a low-income individual navigating legal complexities without the means to hire an attorney. An AI could provide at least basic guidance, clarify legal jargon, and suggest possible actions. All of it must be done with proper disclaimers. It is not a substitute for legal representation, but it is a world better than the alternative: no help at all.

In embracing this non-competing stance, we shift the narrative. The role of AI is not to replace human experts but to step in where human services are scarce or nonexistent. The true potential of AI lies in its ability to democratize access to essential services that many people currently go without. When AI is viewed as a bridge rather than a rival, its utility becomes much more evident. AI does not have to be better than a person to be valuable; it just should be better than the void it fills.

Meet Jinni, a Universal Assistant Bot

In a busy campus with 30,000 students, hundreds of faculty, and staff, managing everyday tasks and emergencies can be tricky. Imagine a universal bot, named Jinni, designed to assist everyone regardless of what they want and need to happen. Here’s a glimpse into how this could transform daily life on campus.

Take Dr. Nguyen, for instance. A junior professor with a packed schedule, she was just invited to present at a conference in Milan but wasn't sure how to get funding. She turned to Jinni.
"Good afternoon, Professor Nguyen. What do you need today?" Jinni asked.
"I want to attend a conference in Milan. Can I get support?" she inquired.

Jinni quickly scanned the institutional website and the financial data wharehouse and responded, "In your College, it takes a request from your Associate Dean. There is still some travel budget left, but you need to hurry. However, if it’s not a peer-reviewed conference and you’re not presenting, I wouldn't bother—the College's policy does not allow for this."

It added, "If you’d rather tell me the details about the conference and upload the invitation letter, I can file the request for you. Or, you can follow the link and do it yourself."

Professor Nguyen appreciated the options and the clarity, and chose to upload her details, letting Jinni handle the rest. Within a minute, Jinni said "Done, you shuold hear from the dean's office within a week. I alrready checked your eligibility, and recommended the Associate Dean to approve."

Then there was Mr. Thompson, a new staff member who discovered a puddle in the lobby after a rainy night. He pulled out his phone and described the situation to Jinni.

"You need to file an urgent facilities request. Here’s the link. Would you like me to file one for you? If yes, take a picture of the puddle," Jinni offered. "But if it’s really bad, you may want to call them. Do you want me to dial?"

Mr. Thompson opted for the latter, and within moments, Jinni had connected him to the facilities team.

Finally, there was Jose, a student who had missed the course drop deadline because of a bad flu. Anxious and unsure what to do, he asked Jinni for help. 

"Sorry to hear you’ve been sick. Jose. Yes, there is a petition you can file with the Registrar," Jinni replied. "I can do it for you, but I need a few more details. Do you have a note from your doctor? If not, you should get it first, then take a picture of it for me. If you used the Campus Health Center, I can contact them for you to request documentation. I will then write and submit the petition on your behalf. I will also need a few details - which class, the instructore's name, when you got sick, etc." Jose was relieved to find a straightforward solution to his problem and began to answer Jinni's questions one by one. 

The technology to create a universal agent bot like Jinni is not yet on the open market, but all elements do already exist as prototypes. More advanced customizable AI models, trained on extensive and diverse datasets, are essential to handle such tasks. More active, agentic AI also does exist. It can file and submit forms, not just find them. But even if we could to simply find and interpret policy and procedures, and point users to the right forms, it would alredy be a huge step forward. 

Simplifying and streamlining hundreds of procedures that any complex organization develops is definitely possible, but we know few examples of successful transformations like that. The next best thing is to use AI to help people navigate those procedures. This will lower barriers for all and reduce transactional costs. 

AI is not going to implement itself, but governments can help

The AI hype has passed, and the overexcited futurists' voices are mercifully fading away. We're now entering a practical era where AI is leveraged to boost productivity in businesses, non-profit, and public organizations. This shift brings a sobering realization: AI integration requires a meticulous, pragmatic approach to build reliable and trustworthy systems. It's a lot of work and requires some strategy.

When a single person manages a well-defined workflow, integrating AI is relatively straightforward. It's easy to incorporate AI tools like ChatGPT or Claude to assist with ad copy, reports, or applications. The beauty of these scenarios lies in their simplicity - the user acts as both operator and quality controller, immediately judging the output's effectiveness.

However, the story changes dramatically when we shift to multi-user workflows or more complex processes, where both inputs and outputs are more of a collective responsibility. I recently spoke with an Accounts Payable team who posed a challenging question: "Yes, we can see that AI can help review travel claims, but can you guarantee it's going to be 100% accurate?" I couldn't provide that guarantee; I don't have time to conduct a hundred tests, and I don't even have access to a hundred travel reports. They emphasized their need for completely audit-proof outcomes. This conversation highlighted the trust issues that arise when moving from AI enthusiasts to skeptics in larger organizations. And organizations should have a healthy group of skeptics to remain viable.

I've also recently been a fly on the wall during discussions between healthcare executives and a U.S. lawmaker. The executives explained that each AI-assisted medical procedure needs validation, which is expensive and often duplicated across multiple hospital systems. This challenge extends beyond healthcare. For instance, when using AI to crunch data in all organizations, we need to understand its reliability in analyzing large datasets, cleaning them, and handling outliers.

The problem is that no private institution can conduct the kind of comprehensive testing and validation needed to establish trust in AI systems across various industries. We cannot seriously trust claims of startups who are trying to sell a specialized product to an industry or a government organization. It's not clear how a hypothetical validation private service would monetize such an endeavor.

This is where I believe government involvement becomes crucial. Instead of obsessing with deep fakes and ethics, that's what governments should be doing. Governments can collaborate with industry experts to develop standardized benchmarks for AI reliability and performance. They could establish certification programs that act as quality marks, assuring users that AI systems have undergone rigorous testing. Moreover, government funding could support businesses, NGOs, and government agencies in conducting extensive AI testing, especially benefiting smaller organizations lacking the necessary resources.

In my view, public-private partnerships are key to navigating these challenges. By leveraging expertise from both sectors, we can develop robust testing frameworks and create dependable AI systems. This approach would pave the way for more efficient and innovative workflows across industries, ensuring that the benefits of AI are realized while maintaining trust and reliability. 

Public Money, Private Glory?

At tech events, where AI CEOs bask in the adoration, there's a conspicuous absence in the narrative: the role of public funding and research. These sectors haven't just sprung up through the ingenuity and perseverance of a few brilliant minds; they're the culmination of substantial public investment. Yet, you'd be hard-pressed to hear a word of thanks to taxpayers or governments at these glittering presentations.

The problem with this omission is twofold. Firstly, it promotes a misleading story of technological development—one where breakthroughs seem to happen through sheer brilliance rather than collaborative, incremental progress supported by public funding. This narrative can skew public perception, suggesting that technological advancement might somehow spontaneously occur without structured support. It makes the process seem more magical than methodical, glossing over the reality that innovation is usually more marathon than sprint, and certainly not a solo race.

Secondly, this narrative concentrates excessive admiration—and thus influence—in the hands of tech leaders. Celebrated as visionary and almost superhuman, these individuals often come to wield significant power, not just over their companies but within society itself. Yet, while they may be exceptional in their fields, they frequently lack broad education in social sciences and humanities, or experience in broader human affairs, areas crucial for understanding the implications of the technologies they unleash. This can lead to decisions that prioritize innovation over social impact considerations or public welfare, a risky imbalance.

The superstar culture in technology isn't just an issue of misrepresentation. It has practical consequences, potentially leading policymakers and the public to undervalue the importance of ongoing governmental support for research. If tech advancements are viewed as products of individual genius rather than results of public investment and collaboration, governments and voters might feel justified in cutting funds to these areas, mistakenly believing the private sector will fill the gap. This could slow innovation and shift the global tech landscape, especially towards countries that maintain robust public funding for research.

Acknowledging the role of public funding in technology isn't about diminishing the achievements of tech leaders—it's about painting a more complete and accurate picture of innovation. This more nuanced understanding could foster better-informed decisions regarding funding, education, and policy, ensuring the ecosystem that nurtures new technologies remains dynamic and well-supported.

Ultimately, recognizing the collective contributions to technological advancements isn't just about giving credit where it’s due. It's about ensuring a balanced narrative that neither idolizes the individual innovator nor underestimates the foundational role of public investment. By correcting this imbalance, we can encourage a more sustainable, equitable approach to technology development—one that's grounded in reality and attentive to the broader implications of rapid technological change.

AI revolution minus massive unemployment

The conversation on AI often revolves around efficiency and cost reduction, typically translating into fewer jobs. However, a pivotal shift in perspective—from cutting workforce to enhancing and expanding workforce capabilities—can redefine the role of AI in the corporate world. This approach not only preserves jobs but also adds significant value to customer experiences and broadens the spectrum of services and products a company can offer. 

The traditional method of dealing with technological disruption—laying off workers and hiring new ones with the necessary skills—is not only a waste of human capital but also disregards the cultural knowledge embedded within an organization's existing workforce. Retraining keeps people within the organization, allowing them to shift roles while retaining and applying their invaluable understanding of the company's ethos and operations in new ways.

The first step in a proactive workforce transformation strategy is to map out the anticipated skills and roles that will be in demand. This is not just about foreseeing the obsolescence of certain skills but identifying emerging opportunities where AI can augment human capabilities. For instance, with the rise of AI-driven analytics, there is a growing need for professionals who can interpret and leverage these insights into strategic decisions, enhancing business intelligence far beyond current levels.

Once future needs are mapped, the next step is to develop a compelling incentive structure for retraining. Traditional models of employee development often rely on mandatory training sessions that might not align with personal or immediate business goals. Instead, companies should offer tailored learning pathways that align with career progression and personal growth, supported by incentives such as bonuses, career advancement opportunities, and recognition programs. This approach not only motivates employees to embrace retraining but also aligns their development with the strategic goals of the organization.

With AI's capacity to handle repetitive and mundane tasks, employees can redirect their efforts towards more complex, creative, and meaningful work. This shift enables businesses to expand their service offerings or enhance their product features, adding significant value to what customers receive. For example, financial advisors, freed from the tedium of data analysis by AI tools, can focus on crafting bespoke investment strategies that cater to the intricate preferences and needs of their clients. Similarly, customer service representatives can use insights generated by AI to provide personalized service experiences, thereby increasing customer satisfaction and loyalty.

AI not only optimizes existing processes but also opens new avenues for innovation. For instance, in the healthcare sector, AI can manage diagnostic data with high efficiency, which allows healthcare providers to extend their services into preventive health management and personalized medicine, areas that were previously limited by resource constraints. In the retail sector, AI-enhanced data analysis can lead to the creation of highly personalized shopping experiences, with recommendations and services tailored to the individual preferences of each customer, transforming standard shopping into curated personal shopping experiences.

For successful implementation, organizations must foster a culture that views AI as a tool for empowerment rather than a threat to employment. Leadership should communicate clearly about the ways AI will be used to enhance job roles and the benefits it will bring to both employees and the company. Regular feedback loops should be established to adjust training programs based on both employee input and evolving industry demands, ensuring that retraining remains relevant and aligned with market realities.

By focusing on retraining the workforce to harness AI effectively, businesses can transform potential disruptions into opportunities for growth and innovation. This approach not only preserves jobs but also enhances them, adding unprecedented value to the company and its customers, and paving the way for a future where human ingenuity and artificial intelligence work hand in hand to achieve more than was ever possible before.