Prediction Machines, Updated and Expanded: The Simple Economics of Artificial Intelligence

The Economist has named "Prediction Machines" one of the five best books to understand AI. It recasts the rise of AI as a drop in the cost of prediction, providing economic clarity about the AI revolution and a basis for action by executives, policy makers, investors, and entrepreneurs. The book illustrates how prediction tools increase productivity, create opportunities for new business strategies, and how foundational technologies such as quantum computing will impact business choices.

Format: Hardback
Length: 272 pages
Publication date: 26 October 2022
Publisher: Harvard Business Review Press

The impact of artificial intelligence (AI) is profound, yet the economic framework for understanding it is surprisingly simple. AI has the ability to bring machines to life, enabling them to perform tasks such as driving cars, trading stocks, and teaching children. However, facing the sea change that AI brings can be paralyzing. Companies, governments, and individuals need to set strategies, design policies, and plan their lives for a world that is vastly different from what we know.

In the face of such uncertainty, many either cower in fear or predict an impossibly sunny future. However, in "Prediction Machines," three eminent economists recast the rise of AI as a drop in the cost of prediction. By doing so, they provide economic clarity about the AI revolution and offer a basis for action by executives, policy makers, investors, and entrepreneurs.

In this new, updated edition, the authors illustrate how, when AI is framed as cheap prediction, its extraordinary potential becomes clear. Prediction is at the heart of making decisions amid uncertainty. Our businesses and personal lives are riddled with such decisions. Prediction tools increase productivity, operating machines, handling documents, and communicating with customers. Uncertainty constrains strategy. Better prediction creates opportunities for new business strategies to compete.

The authors reset the context, describing the striking impact the book has had and how its argument and its implications are playing out in the real world. In new material, they explain how prediction fits into decision-making processes and how foundational technologies such as quantum computing will impact business choices.

"Prediction Machines" is a penetrating and insightful book that provides a valuable perspective on the rise of AI and its economic implications. It is a must-read for anyone interested in understanding the future of technology and its impact on society.

Dimension: 234 x 155 (mm)
ISBN-13: 9781647824679
Edition number: Revised ed