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Blockchain's Potential to Restore Trust in Artificial Intelligence In www.ifc.org/thoughtleadership NOTE 74 • OCT 2019 Bridging the Trust Gap: Blockchain’s Potential to Restore Trust in Artificial Intelligence in Support of New Business Models By Marina Niforos Rapid increases in computing power and data generation have turned artificial intelligence, blockchain, and the Internet of Things into potent technologies that are rapidly gaining use in many areas of society and commerce, with significant potential benefits for economic growth and development. These innovative technologies face multiple obstacles to implementation and—particularly in the case of AI—a general wariness of their potential implications for human society. Fortunately, an integrated implementation of the three technologies may be a solution that can restore human trust in AI and blockchain applications, resulting in new business models that deliver data security and privacy, efficiency, and inclusion along with their many other benefits. Artificial Intelligence, or AI, designates “the science and AI already plays a critical role in optimizing processes engineering of making machines intelligent, especially and influencing strategic decision-making, and is intelligent computer programs…enabling an entity expected to have enormous economic and social to function appropriately and with foresight in its implications in the years ahead. Global consulting firm environment.”1 While the technology has existed in some PwC predicts that AI will increase global GDP by an form for almost 60 years, it is the recent combination of additional $15.7 trillion by 2030.4 PwC expects China to deep learning algorithms, greater amounts of data, and reap the greatest economic gains from AI (a 26 percent enhanced computing power that have transformed it into a boost to GDP in 2030), followed by North America disruptive technology with enormous economic and business (14.5 percent). The two combined are expected to total potential across multiple sectors.2 The imminent deployment about $10.7 trillion and account for almost 70 percent of 5G networks, in combination with the widespread of the global economic impact of AI.5 According to use of Internet of Things (IoT) devices, will provide the the PwC study, developing countries are projected to infrastructure for faster and more stable data generation, see more modest gains from AI due to slower rates of which in turn will enable the ever more rapid development technology adoption,6 despite the fact that these markets of AI technologies and spawn new business models, and will have significant opportunities to use AI technologies to radically alter the way entire industries operate.3 leapfrog traditional development models.7 About the Author Marina Niforos ([email protected]) is the founder and Principal of Logos Global Advisors, a strategy and innovation advisory firm based in France. She holds mandates on the boards of a French listed company and the Hellenic sovereign investment fund. She is also Visiting Faculty on Leadership at HEC (Hautes etudes commerciales de Paris), a French business school. 1 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. AI thrives on data: the more data that is fed into its algorithms, threat to employment have only added to wariness about the more intelligent they become. Yet this massive demand the technology. for and accumulation of data has made it necessary to find As a result, there is a widely held desire for greater better systems for data storage and processing. Along with transparency and accountability with regard to AI cloud computing, Distributed Ledger Technology (DLT)8 technologies, including a call for agreed ethical guidelines has been put forth as a potential way to store, manage, over their implementation.17 Along those lines, AI data and process data generated by AI.9 Blockchain acts as a storage systems need to be able to provide more safeguards distributed database,10 maintained by a peer-to-peer network in terms of reliability, accessibility, scalability, and of users, without a central authority or intermediary, to affordability.18 validate business processes and act on data.11 The AI Trust Deficit DLT is a fairly new technology that has not yet attained maturity, having come into existence with the birth of The AI trust deficit needs to be resolved if the technology’s bitcoin in 2008. DLTs have been gaining momentum, promises of economic growth and innovation of data collecting $5.5 billion in venture capital flow through 2018 marketplaces are to be realized. Fortunately, blockchain- and showing equal pace in 2019.12 Gartner forecasts that enabled storage systems are a potential solution, one blockchain will generate an annual business value of more that may be able to build and maintain trust between than $3 trillion by 2030.13 Blockchains are more than a human communities and artificial intelligence applications technical solution to solve the problem of double-spend designed to benefit them. in digital cash, “they can change the balance of power in networks, markets and even the relationship between AI and Data: Need for Adapting Governance the individual and state.”14 The technology is being tested Rules in cases across multiple sectors to provide secure, digital Data has been called the “new oil,” as its proliferation identification, to manage fraud and ensure transparency offers staggering potential to drive economic growth in global value chains, and to create greater transparency and innovation. Yet unlike oil, data is not an exhaustible and efficiency in financial and government services. Yet resource,19 and AI algorithms can continually adapt and the technology is also likely to take years and go through evolve organically with its availability. Yet as the business several transformations before it becomes mainstream.15 community becomes increasingly aware of the massive Nevertheless, this distributed form of data sharing provides economic value of AI applications, it is also becoming some novel attributes over centralized databases, and these clear that adapting governance rules for these emerging can be essential to addressing some of the challenges of AI, marketplaces is quite complex. The concept of nonrivalry including: (i) enhanced security since there is no central of data, and the fact that data can be used by many point of attack; (ii) transparency and auditability, as the firms simultaneously, imply increasing returns and have data is available to all participants in real time; and (iii) important implications for market structure and property immutability and traceability, since its consensus-based rights.20 Consumers and individual citizens are increasingly verification makes it virtually impossible to tamper with aware of the value of their personal data and are data or obfuscate its origin. If blockchain is able to deliver demanding greater control over its use and monetization these advantages at scale, with speed and cost-efficiency, it (the focus on privacy protection by policy-makers and could provide an efficient and transparent infrastructure for the proliferation of privacy laws are evidence of this). In AI data generation and processing. the United States, Facebook recently received a record $5 billion fine and agreed to new layers of oversight to settle The ability of blockchain to potentially provide a “trust privacy violations, in addition to acknowledging it was mechanism” for AI data ecosystems is critical. There is under investigation from the Federal Trade Commission for growing mistrust among both businesses and citizens— antitrust concerns.21 as well as increasing perceptions of risks regarding governance—about AI data collection and usage. Personal Data Marketplace: Protection Awareness about the technology’s strategic importance and Monetization raises concerns about its ability to make important decisions in a fair and transparent way, respecting human While the vast majority of data is generated by machines, values that are relevant to the problems being tackled.16 more than 10 percent of total data is created by people, Concerns about AI-powered automation and its potential which represents nearly a quarter of a trillion dollars in 2 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. economic value each year for the companies able to use it.22 the traceability of data, and where and how data originated It has been posited that the recognition of data property and was processed by AI systems. The perceived lack of rights in favor of the consumers who generate it can be an transparency and accountability is holding back faster optimal market allocation mechanism, since consumers are adoption despite recognition of its ability to drive business likely to establish a balance between the value from the sale value creation. A recent report by the IBM Institute of their data and their privacy.23 of Business Value underlines this ambivalence of the business community: 82 percent of enterprises surveyed If data are needed to help AI make better decisions, it is are considering AI adoption, attracted by the technology’s important that the humans providing that data are aware value creation potential, yet 60 percent of those same of how it is handled, where it is stored, and what uses it companies fear liability issues, and 63 percent say they lack is put to. This is particularly important in industries like the skills to harness AI’s potential.29
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