ARTIFICIAL INTELLIGENCE
by Leo Melamed

2010 CME Group
Fred Arditti Innovation Award

Naples, Florida
October 19, 2010

Artificial Intelligence! That’s how most 18 year olds define their parents!

It is also how Republicans define Democrats! And vice versa!

Actually, artificial intelligence, or AI as it is known in the trade, defines a machine that can perform intelligent activities necessary in a wide spectrum of human endeavors. The term was coined by John McCarthy, an American computer scientist, at a Dartmouth Conference in 1956 that proposed that “every aspect of learning or any other feature of intelligence can be so precisely described that a machine can be made to simulate it.”

However, long before the modern AI definition, the quest for machines performing human activities has been an on-going mission of civilization. From the invention of the wheel, to Aristotle’s introduction of syllogistic logic, to moving type that led to the printing of the Gutenberg Bible, to the steam engine, to the harnessing of electrical power, to introduction of the transistor, to the development of the computer and its publicly accessible Internet network, the history of mankind represents a continuous progression of mechanical inventions that assumed and advanced human needs.

In a similar vein, a mechanical device that take the place of intelligent thought has been the ultimate prize in the Arts from the beginning of time. In Greek mythology, Hephaestus, a blacksmith manufactured mechanical servants. In 1580, the great Rabbi of Prague, Judah Loew ben Bezalel, produced the legend of the Golem, a super human creation endowed with life. Mary Shelley, in 1817 created the Frankenstein monster. Later, in 1923, like Shelley’s creation, Czech writer Karel Čapek created a similar robot in his literary imagination. And who can forget “Hal,” in Stanley Kubrick’s movie “2001: A Space Odyssey.”

Unfortunately, most of the noteworthy fictitious creatures, as we know, often became dangerous entities when they breached the benevolent purpose of their creator and wreaked havoc on the world. Computer technology gone wrong was a very common theme in fiction. It gave AI robotics a bad name. Something had to be done to change this negative image.

In the last century, beginning in the 1940s, scientists from a variety of fields—mathematics, psychology, engineering, economics and political science–began a serious discussion of the creation of an artificial brain. The real breakthrough came with the first modern computers such as the ENIAC and UNIVAC. The IBM 702, developed in 1955, was used by the first generation of AI researchers. Of course, we all remember IBM’s Big Blue, a chess-playing computer that on May 11, 1997, won a six-game match by two wins to one with three draws against world champion Garry Kasparov.

This victory also served to reverse the AI image in the movies and sponsored “good” guys such as “Robocop,” and the “Terminator” series. Of course, early AI projects are superficial compared to today’s sophisticated computer capabilities. And there is no end to it. Still, the field has had its ups and downs. Often it depended on how it was seen in the eyes of government bureaucrats who have generally been more than a few steps behind advances in technology.

A case in point is the current scrutiny over the cause of this year’s “Flash Crash,” on May 6th. It has caused regulators and some members of Congress and the press to focus attention on the role of high frequency trading and automated trading algorithms—in other words, AI in markets. While a regulatory review and analysis of computer technology used in markets is proper and welcome, the suspicious tone by which it was conducted is dangerously close to evolving into something of an “anti-technological syndrome.” We trust we are overly sensitive in this regard since such a movement would represent a slippery slope with highly negative implications to innovation—the driving force of American ingenuity and greatness for the last 200 years.

All the more reason why the CME Innovation Center and its Competitive Market Advisory Council is proud of its 2010 Fred Arditti Innovation Award Winner, Dr. David Ferrucci, a senior IBM researcher. Among his impressive credentials is a PhD from Rensselaer Polytechnic Institute. His work in AI has led him to the role as the principal investigator developing technologies for discovering knowledge in natural language. It is the foundation for a computer system called “Watson,” after IBM’s founder Thomas J. Watson—a system so advanced that beginning this fall it will compete against champion players on Jeopardy, the popular TV quiz show. Watson is designed to rival the human mind’s ability to understand the actual meaning behind words and distinguish between relevant and irrelevant content.

The consequential result of this research will have material applications in medicine, transportation, banking, markets, and other industries that require time-critical decisions. The CME Group Center for Innovation is pleased to recognize the breakthroughs in artificial intelligence made possible by Dr. David Ferrucci and present him with the 2010 Fred Arditti Innovation Award.

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