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1 big thing: Will AI make us dumb?

Illustration: Rebecca Zisser/Axios

Since the Enlightenment, humans have made unprecedented advances — in science, technology, health conditions, living standards and more — as reason and analysis replaced superstition. Now, technology may be threatening that system.

Driving the news: In a much-read essay in The Atlantic, former Secretary of State Henry Kissinger argues that powerful artificial intelligence could replace human thought with data-driven decision-making.

If that happens, Axios' Kaveh Waddell reports, AI could chip away at our ability to think critically.

AI, by mastering certain competencies more rapidly and definitively than humans, could over time diminish human competence and the human condition itself as it turns it into data.
Henry Kissinger, in his June Atlantic essay

The context: Kissinger is referring to artificial general intelligence, a future form of AI that would be capable of human-like thought in a variety of fields. That’s very different from today's AI: algorithms that perform narrow tasks like identifying images and operating self-driving cars.

The big picture: Kaveh spoke with a half-dozen people from different fields about the essay. Some found it hard to fathom given how far AI is from general intelligence. Others, however, agreed with Kissinger's central thesis. Here is a sampling.

  • "I worry that human abilities may atrophy," says Daniel Weld, a professor at the University of Washington who studies human-computer interaction.
  • "My gut instinct is that we’ll get dumber in some ways — on the principle of muscle atrophy — even as we process vastly more information," says Darrin McMahon, a history professor at Dartmouth College who has written books about the Enlightenment.
  • McMahon told Kaveh to read the final paragraph of Michel Foucault’s 1966 book, "The Order of Things." In it, the philosopher imagines an ebbing of the ideas that defined humanity for centuries:
If some event of which we can at the moment do no more than sense the possibility — without knowing either what its form will be or what it promises — were to cause them to crumble … then one can certainly wager that man would be erased, like a face drawn in sand at the edge of the sea.

For now, AI is nowhere near rendering humans brains mush.

  • Today’s AI can’t yet approximate the abilities of even a 2-year-old child.
  • Andrew Ng, who founded Google Brain and launched Baidu's AI lab, tells Axios that AI at this stage is simply a tool, like Google or a calculator.

Whether AI does eventually approach or surpass the human capacity for broad thinking, there’s an alternate future in which machines don’t take over complex decisions completely, but instead supply humans with relevant advice and data.

  • Basic forms of these "centaurs" — so named because they're half human and half other being — already exist, as we’ve reported. Weld, for his part, considers this future more likely than Kissinger's.

The bottom line: Even in its current form, AI is well-suited for the Enlightenment-style thinking that Kissinger worries humans will abdicate.

  • In McMahon’s characterization, the Enlightenment elevated a type of analysis called "instrumental reason," a profit-loss calculus in which computers excel.
  • What remains is to set long-term goals. "This can tell us how to live. But something else has to tell us what to live for," McMahon said.
2. The Amazon advertising crocodile

Illustration: Rebecca Zisser/Axios

For traditional retailers, existing alongside Amazon on the internet is getting tougher.

What's happening: Amazon is gobbling up Google results on companies, sending users to Amazon even when they search specific key words related to other retailers, market research firm Gartner L2 notes in a new report, writes Erica Pandey.

  • When you search "ethan allen recliners," the first result that comes up may not be Ethan Allen, but Amazon. That's because Amazon is buying Google ads against these customer search queries, forcing retailers to buy ads, too, says Griffin Carlborg, the lead author of the Gartner report.
  • Amazon is popping up for 23% of Ethan Allen's search terms, 32% of Ashley Furniture's terms and 47% of HomeGoods' terms, per Gartner's analysis.
  • Amazon owned 15% of a sampling of 1,353 search keywords representing businesses ranging from sporting goods to home appliances. Amazon wins half of this 15% with the sheer power of its own brand, and it pays for the other half.

The bottom line: The Amazon effect is changing companies from top to bottom, influencing their decisions on everything from how much they pay their employees to what they spend on Google ads.

3. 10,000 years later, a global middle class

Photo: Bettmann/Getty

Last month marked a global tipping point. For the first time in the 10,000 years of human civilization, more than half the world's population — some 3.8 billion people — are middle class, according to a report by the Brookings Institution.

Why it matters: Since the agricultural age led humans to organize into society, we have struggled. Through the early 19th century, civilization as a whole was essentially hand to mouth. Beginning with the Industrial Age, though, living standards began to improve. As of now, the number of poor people is down to 630 million people — 8% of the world population, say Brookings' Homi Kharas and Kristofer Hamel.

By the numbers:

  • 1 person every second escapes extreme poverty
  • 5 people every second enter the middle class
  • 1 person every 2 seconds becomes rich

How they calculated: Kharas and Hamel's basic definition of middle class is the availability of discretionary income — whether people have money above and beyond their absolute necessities.

Reality check: Half the global population is still poor or vulnerable to falling into poverty, Hamel and Kharas say.

4. Worthy of your time
Expand chart
Data: FactSet; Chart: Chris Canipe/Axios

Catastrophic breakdown in trust (John Authers — FT)

The 18,927 ways to avoid U.S. tariffs (Chuin-Wei Yap — WSJ)

Consumerism is driving the U.S. stock boom (Felix Salmon — Axios)

Finding an alien ocean (David Brown — NYT)

How to know if anything quantum has happened (Erica Klarreich — Quanta)

5. 1 fun thing: The toy trade

Photo: Tom Pennington/Getty

Investors are talking about reviving the bankrupt Toys "R" Us, but its multibillion-dollar business is meanwhile being picked over by the big three — Amazon, Walmart and Target.

What's happening: Target and Walmart are adding floor space to accommodate more toys this holiday season, reports WSJ. And they are in a pitched toys battle with Amazon online, according to the Gartner L2 report, writes Erica.

By the numbers: Toys "R" Us took 15% of the $27 billion U.S. toy market last year, selling $1.4 billion worth in just December 2017.

  • The battle to capture those sales is visible in online search terms — how buyers get to the site where they purchase stuff for their kids.
  • In 2017, Toys "R" Us owned the search results for 70% of toy-related keywords, such as "nerf guns" and "doll house." Babies "R" Us owned 81% of keywords in its arena, like "booster seat" and "diapers."

But this year, Amazon topped search results for 95% of toy terms and 88% of baby terms, per Gartner L2.

  • That is a huge triumph for Amazon, which set its sights on toys right after books and movies. Amazon's toy sales jumped 12% to $2.16 billion in 2017.
  • Target and Walmart products float to the top for 60–80% of search terms.