Artificial intelligence (AI) and automation more broadly continue to be identified as the next frontier in productivity enhancement and growth. Last year, McKinsey estimated AI could potentially increase economic outputs by $13 trillion by 2030, and add to global GDP by approximately 1.2 per cent.1
Consistent with the trend, it is likely that Australian boards will increasingly look to AI and machine learning to improve the quality of their decision-making. But can an algorithm run a company instead of a director?
The term ‘AI’ is often used synonymously with machine learning, but this is not strictly correct.
True AI exhibits features of human-like intelligence and the ability to use human-like judgment in decision-making. This is in contrast to machine learning tools that conduct statistical analysis of data sets to identify patterns, but which are not exercising ‘judgment' to reach conclusions. Despite these differences, both AI and machine learning tools rely on large, high-quality data sets to improve, and both will inevitably make mistakes along the way.