Skip to main content

Goldilocks and artificial intelligence


For my day job, I recently wrote an article on the use of artificial intelligence within a certain specialized field of investing.

I won't tell you what the investments in question were. Rather, I'd like to make a point about AI that I learned, or at least came to appreciate more fully, while working on this piece.

One of my interviewees for the story told me this,  

  “For many people, AI is still a black box.  But the source of the innovation, and of the resulting errors, is in principle simple: a random number generator. This is attached to a machine-learning system that reins in that randomness according to a model of what is realistic and what is not.”

So: randomness is critical to AI, just as it is critical to, say, biological evolution. Random variations give the process of natural selection some clay to shape.

In the AI context, this notion of AI as a box containing a random number generator which has to be restrained reminds me of Goldilock's love of porridge if and only if the temperature of the porridge is JUUUUUST right. The porridge may have to be heated so that it can be allowed to cool down to perfection.

Too much randomness, and AI is concocting a dreamworld, and your risk management goes out the window. Or, to take a recent non-financial example: you can end up with a newspaper running articles about the hot summer books -- and offering an AI generated list of books that do not exist.

Too little randomness, though, and you have "overfitting," a slavish obedience to historic trends that leaves the algorithms blind to the possibility of the unexpected -- the unknown unknowns. Developers in the AI space will continue to try to get the amount of randomness that the system allows its number generator "juuuust right."

Just a thought. Not a porridge that I've allowed to cool yet.

More on AI tomorrow.


Labels:

Comments

  1. Paul D. Van PeltMay 29, 2025 at 6:39 AM

    I will wait for the porridge. Or a good, hot bowl of French onion soup.

    ReplyDelete

Post a Comment

Popular posts from this blog

A Story About Coleridge

This is a quote from a memoir by Dorothy Wordsworth, reflecting on a trip she took with two famous poets, her brother, William Wordsworth, and their similarly gifted companion, Samuel Taylor Coleridge.   We sat upon a bench, placed for the sake of one of these views, whence we looked down upon the waterfall, and over the open country ... A lady and gentleman, more expeditious tourists than ourselves, came to the spot; they left us at the seat, and we found them again at another station above the Falls. Coleridge, who is always good-natured enough to enter into conversation with anybody whom he meets in his way, began to talk with the gentleman, who observed that it was a majestic waterfall. Coleridge was delighted with the accuracy of the epithet, particularly as he had been settling in his own mind the precise meaning of the words grand, majestic, sublime, etc., and had discussed the subject with William at some length the day before. “Yes, sir,” says Coleridge, “it is a maj...
10 comments
Read more

Searle: The Chinese Room

John Searle has become the object of accusations of improper conduct. These accusations even have some people in the world of academic philosophy saying that instructors in that world should try to avoid teaching Searle's views. That is an odd contention, and has given rise to heated exchanges in certain corners of the blogosphere.  At Leiter Reports, I encountered a comment from someone describing himself as "grad student drop out." GSDO said: " This is a side question (and not at all an attempt to answer the question BL posed): How important is John Searle's work? Are people still working on speech act theory or is that just another dead end in the history of 20th century philosophy? My impression is that his reputation is somewhat inflated from all of his speaking engagements and NYRoB reviews. The Chinese room argument is a classic, but is there much more to his work than that?" I took it upon myself to answer that on LR. But here I'll tak...
21 comments
Read more

The Lyrics of "Live Like You Were Dying"

Back in 2004 Tim McGraw recorded the song "Live Like You were Dying." As a way of marking the one-decade anniversary of this song, I'd like to admit that a couple of the lines have confused me for years. I could use your help understanding them. In the first couple of verses, the song seems easy to follow. Two men are talking, and one tells the other about his diagnosis. The doctors have (recently? or a long time ago and mistakenly? that isn't clear) given him the news that he would die soon. "I spent most of the next days/Looking at the X-rays." Then we get a couple of lines about a man crossing items off of his bucket list. "I went sky diving, I went rocky mountain climbing, I went two point seven seconds on a bull named Fu Man Chu." Then the speaker -- presumably still the old man -- shifts to the more characterological consequences of the news. As he was doing those things, he found he was loving deeper and speaking sweeter, and givin...
2 comments
Read more