6 well-known analytics and AI disasters

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In 2017, The Economist declared that information, fairly than oil, had turn out to be the world’s most precious useful resource. The chorus has been repeated ever since. Organizations throughout each trade have been and proceed to speculate closely in information and analytics. However like oil, information and analytics have their darkish facet.

In keeping with IDG’s State of the CIO 2021 report, 39% of IT leaders say that information analytics will drive probably the most IT funding at their group this 12 months, up from 37% in 2020. Insights gained from analytics and actions pushed by machine studying algorithms can provide organizations a aggressive benefit, however errors may be pricey when it comes to repute, income, and even lives.

Understanding your information and what it’s telling you is essential, but it surely’s additionally essential to know your instruments, know your information, and maintain your group’s values firmly in thoughts.

Listed here are a handful of high-profile analytics and AI blunders from the previous decade for example what can go incorrect.

Zillow wrote down hundreds of thousands of {dollars}, slashed workforce as a consequence of algorithmic home-buying catastrophe

In November 2021, on-line actual property market Zillow informed shareholders it might wind down its Zillow Presents operations and reduce 25% of the corporate’s workforce — about 2,000 staff — over the following a number of quarters. The house-flipping unit’s woes have been the results of the error price within the machine studying algorithm it used to foretell residence costs.

Zillow Presents was a program via which the corporate made money affords on properties primarily based on a “Zestimate” of residence values derived from a machine studying algorithm. The thought was to renovate the properties and flip them rapidly. However a Zillow spokesperson informed CNN that the algorithm had a median error price of 1.9%, and the error price could possibly be a lot greater, as a lot as 6.9%, for off-market properties.

Copyright © 2021 IDG Communications, Inc.

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