IBM engineers demonstrate the company's AI and AR-powered human resources system during the IBM Think conference in Singapore on Sept. 13, 2023. Art Fuentes, ABS-CBN News 

MANILA—Artificial intelligence has been front and center in technology since 2022 when OpenAI unleashed ChatGPT to the public. Since then, the excitement over AI's possibilities has driven the market valuations of several tech companies to dizzying heights not seen since the dot-com bubble of the late 1990s.

But aside from investors and companies pouring money into AI systems and attaching “AI-powered” to every conceivable product and service today, governments around the world are also trying to understand the potential and risks involved in the technology and are seeking to regulate it.

Recently, the same investors and firms that were firehosing money into AI have also started pulling back amid concerns that their investments may not be delivering the returns they initially forecast. After peaking around June, the stock prices of tech giants that bet big on AI started to slide from their record highs.

For IBM, which is a pioneer in AI research, investments in the technology need to continue, but in a different direction. The company is also wary of possible overregulation, which may stymie innovation.

Stephen Braim, Vice President, Governmental & Regulatory Affairs, IBM Asia Pacific, said governments should not necessarily regulate the algorithms and technology itself.

REGULATE RISKS NOT TECH

“Should there be a global AI regulator or for that matter, in the Philippines, a national AI regulator? We think the answer to this is is no,” Braim said during a recent online roundtable discussion with journalists.

Braim noted that there are already existing regulators for industries that will be impacted by AI, such as banking.

“Banking regulators–they understand all the risks of banking and fraud and fraud detection bias. And I know it's another technology. So why bring another regulator to sit on top of a an existing regulator?”

According to Braim, IBM acknowledges that there are high risk use cases for AI, such as in transport and health. Self-driving cars and systems that assist aircraft pilots are high risk and need to be regulated.

But other use cases are not high risk. He noted that IBM itself already uses AI in human resources management, customer service and app modernization. Other commercial uses of AI also don’t need regulation.

“Fixing your washing machine, you know, helping you with booking an airline, you know your Netflix flick suggestions. You know, there's a there's a range of stuff that just doesn't need to be regulated.”

He said IBM also does not support bills that aim to make companies compensate workers who may lose their jobs because of AI.

“IBM just doesn't support those at all. The moment you go down that path, any economic change that creates structural adjustment in economy, you're going to hamstring that change because there's a big cost associated with it.”

REALLY BIG DEAL OR HOLLOW HYPE?

In a research paper published earlier this June, Goldman Sachs, noted that “tech giants and beyond are set to spend over $1 trillion on AI capex in coming years, with so far little to show for it.”

“AI technology is exceptionally expensive, and to justify those costs, the technology must be able to solve complex problems, which it isn’t designed to do,”  said Jim Covello, Head of Equity Research at Goldman Sachs.

Large language models used in generative AI, like the one behind ChatGPT and Google’s Gemini “are very very expensive,” Braim admitted.

“And they're very it's very, very costly from an energy consumption point of view to run a large language model data center,” he added.

But he also maintained that investment in AI will continue, but away from large language models and into “niche smaller models that have very specific commercial and enterprise applications to drive productivity.”

He said the investment in AI in the enterprise space is still quite small, and that AI investments in training, HR, service delivery, customer inquiry, product development  will continue.

“Investment in AI has been going on for a long, long time, with proper business use cases, proper ROIs (return on investment.)”

After the seemingly scifi hype around Generative AI, Braim also thinks expectations about the technology will “normalize.”

“It will be integrated in your phone, your car, your, whatever. But it will normalize.”

He also said that the Philippines’ demographics presents unique opportunities for AI adoption because of its young population, high IT adoption and strong innovation focus.