{"id":8731,"date":"2023-09-26T16:30:03","date_gmt":"2023-09-26T15:30:03","guid":{"rendered":"https:\/\/sarasinandpartners.com\/za\/?p=8731"},"modified":"2023-10-17T11:17:41","modified_gmt":"2023-10-17T10:17:41","slug":"ethical-ai-trick-or-treat","status":"publish","type":"post","link":"https:\/\/sarasinandpartners.com\/za\/think\/ethical-ai-trick-or-treat\/","title":{"rendered":"Ethical AI: Trick or Treat"},"content":{"rendered":"<p><strong>Governments, companies and investors all have roles to play in ensuring that AI is a force for good.<\/strong><\/p>\n<p>We invest in a number of companies for whom artificial intelligence (AI) is a key element in their business models and plans for future growth. As investors, we recognise <a href=\"https:\/\/sarasinandpartners.com\/za\/think\/six-minute-strategy-artificial-intelligence\/#storeinvestor\" target=\"_blank\" rel=\"noopener\">the transformational potential<\/a> of this remarkable technology and the significant benefits it could bring in terms of productivity, more advanced healthcare and tackling climate change.<\/p>\n<blockquote><p>At the same time, as stewards of our clients\u2019 capital, it is important that we play a role in ensuring that AI develops in a way that minimises risks to society and our clients\u2019 investments.<\/p><\/blockquote>\n<p>Restricting use of potentially risky technologies is consistent with the precautionary principle that there is a social responsibility to protect the public from harm if scientific investigation has identified a plausible risk.<\/p>\n<p>The <a href=\"https:\/\/sarasinandpartners.com\/za\/think\/ai-deep-impact\/#storeinvestor\" target=\"_blank\" rel=\"noopener\">areas of potential concern are wide-ranging<\/a>, but there are four key issues that pose immediate risks and should be prioritised by regulators and companies involved in developing and providing AI products.<\/p>\n<p><strong>Disruption of democratic processes<\/strong> through manipulation, misuse of personal data, fake news and emotionally charged content. Behavioural nudges and microtargeting techniques have been used in elections since Bill Clinton\u2019s 1996 campaign.<a href=\"#_ftn1\" name=\"_ftnref1\">[1]<\/a> Now, AI has the potential to vastly increase the scale and effectiveness of microtargeting by tailoring messages to millions of individual voters. In addition, it can use a trial-and-error approach called reinforcement learning to make these messages progressively more persuasive.<\/p>\n<p><strong>Perpetuation of discrimination via AI models<\/strong> based on biased or incomplete data. For example, by using previous candidates\u2019 resumes to help shortlist job candidates, an automated recruitment system may perpetuate gender biases such as preferring men for IT roles.<\/p>\n<p><strong>Risks to data security<\/strong>, the functioning of public and private platforms and personal security risks linked to chatbots. For most of April this year, ChatGPT was banned in Italy following concerns that it broke Europe\u2019s General Data Protection and Regulation (GDPR) rules. Also in April, a journalist in the US used AI tools to \u2018clone\u2019 herself and bypass her bank\u2019s security.<a href=\"#_ftn2\" name=\"_ftnref2\">[2]<\/a><\/p>\n<p><strong>Carbon emissions.<\/strong> AI applications need vast amounts of energy, both to train them and run them. Training Open AI\u2019s Chat GPT-3 model consumed around 1,287 MW hours of electricity, causing emissions of 550 tons of CO<sub>2<\/sub>e \u2013 equivalent to 550 return flights between San Francisco and New York.<a href=\"#_ftn3\" name=\"_ftnref3\">[3]<\/a><\/p>\n<p>In addition, other risks are attracting concern but are yet to manifest themselves in practice. These include breaches of intellectual property rights, as well as safety risks associated with autonomous vehicles, AI-applied medical treatments and AI-optimised production processes.<\/p>\n<h3><strong>Regulation alone is not enough <\/strong><\/h3>\n<p>Given the sheer sweep of risks that unregulated AI development and use pose, effective international AI standards are needed to create a level playing field and underpin robust, independent audits to certify compliance.<\/p>\n<p>Numerous legislative initiatives are in progress, including the EU\u2019s\u00a0<a href=\"https:\/\/artificialintelligenceact.eu\/\">Artificial Intelligence Act<\/a>, the US <a href=\"https:\/\/www.wyden.senate.gov\/imo\/media\/doc\/2022-02-03%20Algorithmic%20Accountability%20Act%20of%202022%20One-pager.pdf\">Algorithmic Accountability Act<\/a> and the UK\u2019s Pro-innovation Approach to AI Regulation<a href=\"#_ftn4\" name=\"_ftnref4\">[4]<\/a>. China\u2019s, Ministry of Science &amp; Technology published its <a href=\"https:\/\/cset.georgetown.edu\/wp-content\/uploads\/t0400_AI_ethical_norms_EN.pdf\">AI Ethics Principles<\/a> in 2021 and in July 2023 its internet watchdog, the Cyberspace Administration, issued\u00a0 \u201cInterim Measures for the Management of Generative Artificial Intelligence Services\u201d.<\/p>\n<p>However, it is unlikely that the US, Europe, UK and China will agree on a cohesive approach to regulating AI. It is also unlikely that policymakers can keep up with the pace of AI development.<\/p>\n<p>Until comprehensive government regulation is introduced, self-regulation by companies will be vital. Investors have two critical roles to play. The first is to influence self-regulation by demanding best practice from AI companies; the second is to call for action by policymakers to create a supportive regulatory environment for responsible AI.<\/p>\n<h3><strong>Taking a lead<\/strong><\/h3>\n<p>We are an active member of the <a href=\"https:\/\/www.worldbenchmarkingalliance.org\/impact\/investor-statement-on-ethical-ai\/\">World Benchmarking Alliance (WBA) Digital Collective Impact Coalition (CIC)<\/a>. This investor group focuses on AI ethics and represents the interests of over $6.9 trillion of assets under management.<\/p>\n<p>In this capacity, we have been engaging with three companies, encouraging them to make public commitments to ethical AI principles. These are Amazon (where we co-lead with other Digital CIC members), Apple and PayPal.<\/p>\n<p>Alongside us, other members of the group are engaging with a raft of companies that are reluctant to make public commitments to responsible or ethical AI principles. These include Twitter, Spotify, eBay, Salesforce, Oracle, Airbnb and Alibaba.<\/p>\n<p>With a further 50 names being added to the WBA\u2019s list of focus companies, we have applied to lead engagements with ASML and Keyence, both of which are holdings in many of our clients\u2019 portfolios. We will also be engaging with companies that we hold which are not part of the Digital CIC, but where we see a need for strong ethical AI policies.<\/p>\n<h3><strong>Ethical AI principles are the first step<\/strong><\/h3>\n<p>Encouraging companies to make public commitments to ethical AI principles is an essential first step, but it is just the beginning. By bringing together like-minded investors, Digital CIC can also bring significant collective pressure to bear in establishing new norms for responsible AI such as stress-testing AI technologies for risks to human rights (human rights impact assessments) and promoting openness about how algorithm-based decisions are made.<\/p>\n<p>Most important will be establishing governance systems that specify responsibilities, oversight processes and enforcement measures. Companies should complete annual independent audits of how they are implementing ethical AI principles and policies, and publish summary results.<\/p>\n<p>The ability to learn collectively from mistakes will also be vital: companies should therefore disclose takeaways from their impact assessments, including specific cases of failure and remediation steps taken.<\/p>\n<p>We are evolving our approach from asking companies to adopt robust public AI principles and policies to assessing how they implement best practice in their day-to-day business. Looking ahead, Sarasin and Partners will continue to focus on assessing and preventing risks associated with specific riskiest use cases of AI from a human rights perspective, such as targeted advertising, content dissemination and facial recognition.<\/p>\n<p><span class=\"small-paragraph-text\"><a href=\"#_ftnref1\" name=\"_ftn1\">[1]<\/a> The Evolution of American Microtargeting: An Examination of Modern Political Messaging, Luke Bunting, 2015<\/span><\/p>\n<p><span class=\"small-paragraph-text\"><a href=\"#_ftnref2\" name=\"_ftn2\">[2]<\/a> The Wall Street Journal, <em>I cloned myself with AI. She fooled my bank and my family<\/em>, 28 April 2023<\/span><\/p>\n<p><span class=\"small-paragraph-text\"><a href=\"#_ftnref3\" name=\"_ftn3\">[3]<\/a> Carbon Credits.com; How Big is the CO2 Footprint of AI Models? ChatGPT\u2019s Emissions, 30 May 2023<\/span><\/p>\n<p><span class=\"small-paragraph-text\"><a href=\"#_ftnref4\" name=\"_ftn4\">[4]<\/a> <a href=\"https:\/\/www.gov.uk\/government\/publications\/ai-regulation-a-pro-innovation-approach\/white-paper\">https:\/\/www.gov.uk\/government\/publications\/ai-regulation-a-pro-innovation-approach\/white-paper<\/a>; see also https:\/\/policyreview.info\/articles\/analysis\/artificial-intelligence-regulation-united-kingdom-path-good-governance<\/span><\/p>\n<hr \/>\n<p><strong>Important information <\/strong><\/p>\n<p><strong>If you are a private investor, you should not act or rely on this document but should contact your professional adviser. <\/strong><\/p>\n<p>This promotion has been approved by Sarasin &amp; Partners LLP of Juxon House, 100 St Paul\u2019s Churchyard, London, EC4M 8BU, a limited liability partnership registered in England &amp; Wales with registered number OC329859 which is authorised and regulated by the Financial Conduct Authority with firm reference number 475111.<\/p>\n<p>The investments of the fund are subject to normal market fluctuations. <strong>The value of the investments of the fund and the income from them can fall as well as rise and investors may not get back the amount originally invested<\/strong>. If investing in foreign currencies, the return in the investor\u2019s reference currency may increase or decrease as a result of currency fluctuations.\u00a0 <strong>Past performance is not a guide to future returns and may not be repeated.<\/strong><\/p>\n<p>All details in this document are provided for marketing and information purposes only and should not be misinterpreted as investment advice or taxation advice.\u00a0 This document is not an offer or recommendation to buy or sell shares in the fund.\u00a0 You should not act or rely on this document but should seek independent advice and verification in relation to its contents.\u00a0 Neither Sarasin &amp; Partners LLP nor any other member of the J. Safra Sarasin Holding Ltd group accepts any liability or responsibility whatsoever for any consequential loss of any kind arising out of the use of this document or any part of its contents.\u00a0 The views expressed in this document are those of Sarasin &amp; Partners LLP and these are subject to change without notice.<\/p>\n<p>This document does not explain all the risks involved in investing in the fund and therefore you should ensure that you read the prospectus and the Key Investor Information document which contain further information including the applicable risk warnings.\u00a0 The prospectus, the Key Investor Information document as well as the annual and semi-annual reports are available free of charge from <a href=\"https:\/\/www.sarasinandpartners.com\">www.sarasinandpartners.com<\/a> or from Sarasin &amp; Partners LLP, Juxon House, 100 St Paul\u2019s Churchyard, London, EC4M 8BU, Telephone +44 (0)20 7038 7000, Telefax +44 (0)20 7038 6850.\u00a0 Telephone calls may be recorded.<\/p>\n<p>Where the data in this document comes partially from third party sources the accuracy, completeness or correctness of the information contained in this publication is not guaranteed, and third-party data is provided without any warranties of any kind.\u00a0 Sarasin &amp; Partners LLP shall have no liability in connection with third party data.<\/p>\n<p>\u00a9 2023 Sarasin &amp; Partners LLP \u2013 all rights reserved.\u00a0 This document can only be distributed or reproduced with permission from Sarasin &amp; Partners LLP. Please contact <a href=\"mailto:marketing@sarasin.co.uk\">marketing@sarasin.co.uk<\/a>.<\/p>\n<p><a href=\"#_ftnref1\" name=\"_ftn1\"><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Governments, companies and investors all have roles to play in ensuring that AI is a force for good. We invest in a number of companies for whom artificial intelligence (AI) is a key element in their business models and plans for future growth. As investors, we recognise the transformational potential of this remarkable technology and...<\/p>\n","protected":false},"author":80,"featured_media":14280,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"coauthors":[205],"class_list":["post-8731","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stewardship-thoughts"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Ethical AI: Trick or Treat - Sarasin &amp; Partners South Africa<\/title>\n<meta name=\"description\" content=\"AI can be a force for good if governments, companies and investors collaborate to ensure that it develops responsibly and with accountability in a robust regulatory framework\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/sarasinandpartners.com\/za\/think\/ethical-ai-trick-or-treat\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ethical AI: Trick or Treat - Sarasin &amp; 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