We wrote last month about currency and tariffs, mentioning that we should deal with the here and now as best we can and shift part of our focus to the long-term underlying trends in the world like technology and innovation, which leads us to something we mentioned in particular: Move 37.

What is Move 37 and how did it affect the world?

In 2016 AlphaGo, a program developed by Google DeepMind, faced off against Lee Sedol, a professional Go player at his peak and one of the greatest players in the game’s history. At the time, the results of the five match event were shocking. So what is the board game Go? Known as “Weiqi” in Chinese or “Baduk” in Korean, Go is an ancient strategic board game developed more than 2,500 years ago where the aim is to control more territory on the board than your opponent.

Although the games are very different, many board game enthusiasts consider Go more complex than chess, and like chess it requires adept decision making, risk management and creativity. The game reached a pivotal moment with DeepMind’s Move 37, a never before seen move that left spectators and professional players alike dumbfounded. This move illustrated in real time that AI had decision making capabilities that could shock human observers and raise questions of what the implications might be of AI’s decision making abilities in areas outside of complex strategic games; could AI turn industry, society, politics and geopolitics upside down much like the industrial revolution did 200 years ago, i.e. what does it mean when a machine makes unorthodox and imaginative, and useful and effective decisions against one of the world’s top professionals and experts?

Move 37 was surprising to observers and seemed irrational to most players, yet it was this seemingly abnormal decision that highlighted AI's capability to elevate itself above and beyond, and to make “out of the box” decisions that in hindsight actually made sense despite seeming foolish at the time. AI's ability to not only learn from existing information but to innovate in ways that humans might not consider was groundbreaking. If we use an analogy of the abacus to the calculator to the electronic spreadsheet, you can see that the productivity enhancement in calculating complex formulas has been greatly increased by using the tool we now simply call a spreadsheet. Accordingly:

Who would go back to an abacus?

Who would go back to horse power from today’s gasoline/diesel engines for pulling large loads?

Who would press for the return of pay phones?

And on and on…

It is not a stretch to see that an AI model with vast decision making neural or Bayesian networks, or trees (depending on the type) will be able to transform complex decision making in healthcare, manufacturing, supply chain management, and finance, where risk modelling is the backbone of decision making. On a more personal level, if you step back and think about all the ways that you use your mobile phone - from calls, texts, taking and sending photos, booking and checking in to flights, checking the weather, signing off on a million dollar house to capturing video, AI could help make it an even more powerful tool.

We should be long-term economic optimists, and having your cash needs met and keeping your debts manageable affords you the staying power to invest for the long-term and benefit from innovation.

Randy, Ian and Harrison