Note The Double Capitalisation
Because in this Intro we're going to examine another failure of AI to take over the world - sorry! do it's job properly. Art!
This may be what you imagine when the phrase 'terrifying AI monster' is used to generate an image, when in reality it would be more like sentient software. Which is realistic but dull, hence the monster above.
ANYWAY this is another item generated from the 'Museum Of Failure' website, so I need to set the scene. Art!
“They invented computer home valuation with the Zestimate 15 years ago, and it’s still not accurate after 15 years of refinement and billions of dollars invested.”
This from one York Baur, tech enterpreneur, a man who knows what he's talking about. Conrad notes that Zillow quotes error rates for it's Zestimates that go as high as 7.5%.
With this as background, you might think they'd be wary about over-reliance on AI as part of their business model. You might, Zillow didn't. Art!
In 2018, after beta testing and under the 'Zillow Offers' brand, they began to use the 'iBuying' model, where the intent was to buy houses, make minor remodelling and sell quickly at a substantial mark-up, using AI to make calculations about what was profitable. This might have worked had coronavirus not bothered the world stage, because COVID sent the real estate market into conniptions. Zillow's algorithm consistently over-valued the property portfolio it was acquiring in 2020 and 2021, with 65% of properties being worth less than what Zillow paid to acquire them. These are not small amounts; in three months during 2021 Zillow bought 9,680 homes, so 6,292 of those were over-valued.
The end result? Zillow closed the Zillow Offers program in November of 2021, eating a loss of $500 million along the way and firing a quarter of it's staff - 2,000 people. Art!
Zillow's hilariously named CEO, Rich Barton
“But what we can’t solve is what the model is going to tell us about how much capital we need to raise, deploy and risk in the future in order to achieve a scale that we think is necessary to offer a fair price to customers for their homes in a competitive way
It seems that the housing market is too complex and rapidly changing for an AI to keep up with, in a role where humble Hom. Sap. performs better. As other technology experts pronounced, just because something can be automated does not mean it should be.
WHERE WAS THE OVERSIGHT? asks Conrad. Was there any? Did they just allow Zillow Offers to chug ahead unsupervised? What happened to auditing? Random testing? Accounting? For the AI to consistently over-value housing stock for two years implies a complete failure in Zillow's ability to monitor and appraise their AI. I've now read three different articles about this debacle and none mention anything about supervision or oversight. Art!
Conrad worries about the evolution of a Skynet in real life, but come on! Zillow's AI couldn't even add up properly. As an example, due to the pandemic, skilled tradesmen able to renovate houses were in short supply, which in turn impacted the turn-around time for selling the renovated homes; the Zillow Offers business model depended on a quick sale. Which wasn't happening. Art!
The above website gives another reason Zillow Offers tanked so badly, which I will quote so as to boost the Word Count.
Machine learning models often assume that the past equals the future, but that is generally not the case in the real world. This is especially true when you are trying to predict a rapidly shifting value, or something that may be impacted by shocks like shifts in purchasing due to unexpected surprises such as a global pandemic.
Big Brother took his eye off the ball, 'twould seem.
TLDR: Hom. Sap. not obsolete yet.
More Gentle Shoeing
I watched a fascinating 'Times Radio' vlog yesteryon, with a psychologist analysing Donnie Dorko's apparent dementia, seemingly frontoparietal in nature. All the symptoms are there. Here's the link:
'Trump will not make it to the end of this term compos mentis' | Psychologist analyses Trump
Dr John Gartner, for your information. He makes a very valid point that Trump is no longer in control, it's the people around him who tell him what to sign and what to say, such as the repellent Steven Miller. Art!
Not literally. Yet.
Dr Gartner counselled viewers that the Donold we see today is the best he's ever going to be, because dementia only ever gets worse over time. Not a very pleasant prospect! Especially since this senile bafune is accompanied everywhere by an officer carrying the 'Football'. Which is nothing to do with sports.
Sack That Sub-Editor!
You ought to know that Conrad is a major spelling and grammar Nazi, two of my best traits, and that any mistake jumps off the page and slaps him around the chops. Art!
THAT SHOULD READ 'AIRBORNE' thank you very much, yet I see they managed to correctly use the Teuton plural of 'Panzerfaust'.
Bah!
O and by the way yes they did. Paratroopers tend to have a lower scale of kit than leg infantry and anything that boosted their firepower was fair game, even if it was of enemy origin. Ranting over.
I Mention Sarah Paine Again
The historian, who actually lived in Moscow during the last years of the Sinister Union. She grants that they have a nice subway system - 'Very retro' in her opinion - but O dear everything else. Art!
'Yes, they make nuclear weapons. Do they make anything else?' Ooooh, that stings! She mentions that her friends were discussing hospitals outside Moscow that lacked plumbing; they had no running water. She and Conrad both wondered how on earth you can run a hospital without running water. How do you wash dishes or flush a toilet? When a friend's daughter cut her hand quite badly, the first hospital they went to had no surgical thread for stitching, so they had to travel to another. Sarah is not a big fan of Ruffia nor it's predecessor. through experience.
Meanwhile, Back In Mordorvia -
Props to Evgen Estrebin over on Twitter, who assembled data about a crisis in the Ruffian coal-mining region in Kuzbass, which seems to have decided not to let oil and gas hog the headlines so exclusively.
1. The coal industry's workforce was cut by 8,500 (-8.8% y/y) 2. Nominal wage growth since the beginning of the year has fallen from +13% to +4%, while in real terms it's (-4%)
3. Utility rates increased by 21% over the year, with heating and hot water rates increasing by 24% year-on-year. 4. Wage arrears began to grow. In three months, they grew from zero to 225 million rubles. The arrears are owed to 2,800 employees.
Workers not being paid is becoming the norm in Modern-day Mordor. It remains to be seen if Agent Krasnov can save them before he drops dead at his White House desk or goes off to la-la land.
Finally -
Darling Daughter is attending The Mansion tomorrow, need to wrap up the birthday gifts!
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