The business risks of AI in the here and now

Rob Walker, VP, decision management & analytics at Pegasystems, examines the difference between Transparent and Opaque AI.

Elon Musk made headlines when he publicly stated that, in his opinion, artificial intelligence (AI) posed a significant threat and is in need of regulation, going so far as to call it a “fundamental risk to the existence of civilisation”.

In contrast, Mark Zuckerberg called such warnings “irresponsible”, and highlighted the benefits of AI in saving lives through medical diagnoses and driverless cars. All too often we see technologists putting AI technology into a box and discussing at length their vision of how it will impact humanity.

Artificial general intelligence

However, the type of AI discussed by Musk and Zuckerberg relates primarily to artificial intelligence that has ‘human level’ cognitive skills, also known as AGI or ‘Artificial General Intelligence’. Despite impressive progress in a series of specialities (from driving cars to playing Go), this technology is not close to imminent. What major public debates often omit is that AI is something that’s already in common use by many in a business context today, and that the associated risks are not about whether it will leave us all in devastation.

Businesses are worrying less about such apocalyptic scenarios, and focusing their energy on the very real risks posed by this technology if it is used incorrectly in the here and now. These dangers can include regulation violations, diminished business value and significant brand damage. Though not disastrous in their impact on humanity, these can still play a key role in an organisation’s success or failure.

Remember that not all AI is created equally. It takes two very different forms – Transparent AI and Opaque AI – both with diverse uses, applications and impacts for businesses and users in general. To provide a brief overview, Transparent AI is a system whose insights can be understood and audited, allowing one to reverse engineer each of its outcomes to see how it arrived at any given decision. Opaque AI, on the contrary, is an AI system that cannot easily reveal how it works. Similar to the human mind, it can be challenging for it to explain exactly how it has arrived at a certain insight or conclusion.

Despite the potentially emotive connotations attached to the labels ‘Opaque’ and ‘Transparent’, we should not let these influence us. There is no ‘good’ or ‘bad’ AI – only appropriate or inappropriate use of each system, depending on one’s own needs. Opaque AI has a range of positive aspects which can prove very useful in the right circumstances. Having to be transparent is a constraint on AI and will limit its power and effectiveness – therefore, in some instances an Opaque system might be the preferable solution.

One potential problem with an Opaque system relates to that of bias. Without the user’s knowledge, an Opaque AI system may start to favour policies that break your organisation’s brand promise. It can be quite easy for an AI system to use neutral data to work out customer details, which it can then use to make non-neutral decisions. For example, an Opaque AI could interpret customer data and use it to start offering better deals to people based on race, gender or other demographics, the potential impact of which could be disastrous for the organisation.


Businesses need to determine how much they are willing to trust their AI. To completely trust an AI system, either the AI needs to be Transparent so that business management can understand how it works or, if the AI is Opaque, it needs to be tested before it is taken into production. These tests need to be vigorous, thorough and extend beyond searching for viability in delivering business outcomes, looking also for unintended biases.

The GDPR will be enforced in Europe from May 2018, mandating that companies must have the ability to explain exactly how they reach certain algorithmic-based decisions about their customers. Those organisations that are able to use some sort of a switch to increase transparency by forcing the methods used by AI to make decisions from Opaque to Transparent will have a particular advantage: they’ll be much more easily able to comply.

One might think that a transparent system would be the preferred choice of many if they could make it unencumbered, but in practice it may be quite a tough decision to make. Businesses are increasingly at a crossroads when it comes to selecting which AI system is right for them. In some cases, the deciding factor may be marginal, with a range of issues relating to profitability, customer experience and regulation to consider before organisations are able to arrive at a decision.

Though it may be the apocalyptic views of AI rebelling against humanity that make the headlines, businesses are right not to overlook the more tangible risks posed by artificial intelligence here today.

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