The Good – and Not So Good – of AI

At its heart, technology exists to solve problems and enrich our lives, but its journey is rarely straightforward.

The rapid integration of Artificial Intelligence (AI) into everyday tools—like search engines, smart speakers, and virtual assistants—perfectly illustrates the challenges that come with disruptive innovation. Here’s a quick look at how AI is improving our lives, but where we also need to take a step back to be more cautious.

The upside of AI: Empowering efficiency

•Has instant access. Unlike humans who are prone to distractions, emotions, or getting tired, AI can operate without any such issues. Since it’s powered by algorithms, human-related points of failure such as stress-induced errors are virtually eliminated.

•Accelerates data processing. AI can quickly sift through vast amounts of data, pinpointing inconsistencies, outliers, and trends in seconds. Tasks that would take a human hours, if not days, are reduced to mere moments, allowing us to focus on higher-level analysis and decision-making.

•Always available for automated tasks. AI automates repetitive tasks, cutting down on administrative busy work and freeing up our time for more complicated tasks. It’s also always available – wherever you have an internet connection.

The downside of AI: Tread carefully

•Plagiarism is likely to occur. AI doesn’t care if the information it creates is owned by someone else. This plagiarism can happen when creating music, text, voiceovers, and other forms of creative expression.

•AI blends truth AND fiction. While AI excels at many things, fact-checking and proper citations aren’t among them. Like Wikipedia, AI can be a useful starting point but shouldn’t be trusted as a sole authority.

AI’s outputs may include inaccuracies, making it unreliable for in-depth research or professional use.

•Lacks true creativity. AI may do a great job to organize and repackage information, but it still falls short when it comes to true innovation. Creativity, by nature, is abstract and requires out-of-the-box thinking that AI has yet to master. Its outputs are rooted in existing data, meaning that groundbreaking ideas remain out of reach.

•Reduces critical thinking skills. While technology often makes life easier, it can also make us mentally lazier. Think about how difficult navigating a new city would be without GPS! Similarly, if we become overly reliant on AI for decision-making, our critical thinking skills may weaken over time, leading to a decline in actual human intelligence.

•Can lead to serious legal and tax issues. Relying on AI for legal, tax, or other professional advice can leave you in hot water. While AI may be appropriate for initial research on a particular issue, remember that AI itself isn’t an attorney or tax preparer. You should still rely on the knowledge and experience of professionals when advice is needed.

The verdict: Use AI as a tool, not a crutch

AI has the potential to be a powerful tool to complement our own human ideas and capabilities. It’s far from ready, though, to be the sole source of truth. Like any emerging technology, it should be approached with both curiosity and caution.

One of my primary objectives is to help you achieve your financial goals through a holistic approach that is tax-efficient in my wealth management and tax resolution practice. For more information, visit www.fredtfoxiii.com.