Dictionary.com, a prominent online lexicon, has selected “hallucinate” as its word of the year for 2023. This decision reflects a unique phenomenon stemming from the rise of artificial general intelligence (AGI), notably exemplified by OpenAI’s ChatGPT, a generative AI chatbot launched in November 2022.
While traditionally, only living organisms can experience hallucinations, the term is now applied to instances where artificial intelligence generates false or irrelevant information, commonly observed in query engines like ChatGPT. These AI “hallucinations” can pose real challenges, as exemplified by incidents such as Microsoft Bing’s AI suggesting a New York Times reporter leave his spouse.
Such occurrences, though sometimes amusing, have serious consequences, as seen when attorneys were fined for incorporating false case citations generated by ChatGPT into a legal brief.
The financial sector, already familiar with risks associated with automation, must exercise caution when integrating AI technologies like AGI. Early instances of AGI hallucinations can lead to erroneous trades, financial losses, and potential market panics, as evidenced by historical events like the 2012 New York Stock Exchange algorithmic trading debacle.
AGI hallucinations can arise due to various factors, including poorly constructed prompts confusing AI models or flawed training data. Solutions to mitigate these issues include retrieval-augmented generation (RAG) techniques and leveraging real-time data sources like Elon Musk’s Grok AI.
Alternatively, blockchain technology presents a promising solution by enabling decentralized and transparent data sharing, reducing the occurrence of AGI hallucinations. A decentralized knowledge graph on blockchain could revolutionize data verification and significantly enhance the reliability of AI-generated insights.
Ultimately, it’s crucial to develop AI systems that operate in accordance with reality, rather than the distorted perceptions they may generate. By implementing robust data verification methods and incentivizing transparent data sharing, we can navigate the evolving landscape of AI-infused information economies with greater confidence and security.