Intro in AI

Machine learning
Computer vision
Natural language processing

Banking
Investment

Generative AI
Large language modeld

I'll show you something about a company called box sentence which actually doesn't really
interesting things on the robotic side so yeah secondly also mentioned code right I thought the
code one is interesting too because a lot of people feel to use AI you need coding and
programming knowledge right out of curiosity how many of you here can and coda program just
raise your hands OK so most of you cannot or may are very nervously raising your hands OK
that's totally fine again I think some of the newer applications for AI use what we call low code
and no code tools meaning that you can use AI without knowing programming and so today
when we talk about machine learning I'll show you an image classification tool that you can use
straight after this workshop and you can just drag and drop pictures and have it have the AI
make some interesting decisions about those pictures OK you don't need any programmer
coding I think that's a big area of fear for a lot of people because they often come to my class
right and before the class I get all these nervous emails and the students are like I don't know
coding or programming I really am afraid to take our class I'm like it's fine a lot of AI these days
does not require any coding or programming but I appreciate you bringing it up because that's
what a lot of people think when they have artificial intelligence any other words that come to
mind when you and there's no wrong answer this is like the easiest test you'll ever get right
absolutely no wrong answer page generator sorry image image generator yeah that's a really
good one as well so when you talk about generative AI you can generate text you can generate
images and today I also want to show you how you can generate sound and videos as well and
we're going to see one example where they use it on the marketing cycles OK so I like that
image generation and the way you can think about video is many images together right so that's
actually how you generate video so if you have the processing power to change one image if
you get a lot more processing power then you can change many images together and typically
when you see video it's about depending on good video it's about 60 frames per second which
means in your front of your eye you see 60 pictures a second and then it actually looks like
moving right it looks like it's moving but it's just many many pictures that come in front of your
eye before you actually see the video there OK so we'll talk about image generation and video
yeah copyright so that's a fantastic one that you bring up a lot of people are worried that AI is
going to train on data and then potentially they will be out of work because of that so actually
for in Hollywood up until just last week there was a big strike right and the reason why there
was a strike is because the people that write the scripts we're basically getting replaced by AI
and they were striking because they were really afraid of that right so I think that's one aspect
of it the other aspect is a lot of people they might create art put it on the Internet and then
these image creation tools are using that to train their model which people are very angry
about OK so we're going to if we get some time we're going to also talk about intellectual
property and a copyright as well but it's a very big very big issue yeah so I appreciate you
bringing that up OK so maybe one more if anyone has one final one going once going twice OK
so in that case you know if we sort of think about what it actually means when you actually take
the word artificial intelligence then you put it into Google or search engine and you will find that
they typically come up with definitions like this right so behavior or as a branch of computer
science dealing with the simulation of intelligent human behavior or something like the
capability of a machine to imitate intelligent human behavior but I think the challenge when you
consider AI as that is that intelligent human behavior to me and intelligent human behavior to
you might actually be very different so for the purposes of our two hours today I want you to
think of AI as simply a tool to achieve an objective OK and I think if you think of it that way it's a
lot less scary right a lot less like terminators gonna come find you and secondly it also means
that the important part is what is the object because especially with finance you can use a from
many different things so because of that you need to be very focused on what you're going to
use AI for and if you know what you're gonna use I4 then it's easy to think about what AI should
you use OK so with purposes again of our discussion today and I hope for you going forward you
start to think of AI the tool to achieve an objective I think you could do that at least #1 you will
definitely be less scared of it because a tool is something that you control and especially in
finance today along the AI that we have there is something that human beings can control and
human beings can potentially work now in terms of how I organized right just in terms of
explanation you can think of AI like an umbrella term so there's many branches of AI and if you
wanted to you can even go and get a PhD in the individual branches I'm going to actually try to
cover 3 branches in two hours so I'm going to obviously simplify everything but nevertheless I
think these are the four main areas are we going to see a lot of commercialization with AI and
so in the very near future you are going to see applications of this not only in finance but also
your life as well and those four branches like I mentioned before are machine learning natural
language processing computer vision and robotics and again that's not in any specific order in
terms of importance again it often comes down to what is the objective you have with your AI
based on your objective you would pick which one actually makes sense OK but in terms of the
lay of the land I would say these are the four main branches where we see major
commercialization most of the industries that so let's then take #1 which is the first one talk a
little bit about machine learning and you probably heard of the topic or the OR the idea but if
you think about machine learning on a very high level given that many of you don't program the
way I want you to think about it is that it's it's about training a machine to identify patterns then
once it learns a pattern predict an outcome based off of the pattern that it saw before OK so
find the pattern predict the outcome I want you to think about it that way whenever you think
of machine learning find the pattern predict the outcome OK now when you're finding a pattern
I also want to make a very important distinction that AI is very good at finding what we call
correlation so really quick visit to statistics but when you think about variables there is
correlation and there's causation OK so correlation means when variable a goes up variable B
goes down OK so when a goes up goes down that's correlation causation is when variable A
goes up does that cause the drop in variable B now AI very good correlation so when one goes
up one other goes down it observes that it's very good at observing that but it is very bad and
basically saying if a goes up that's why B is going down OK so whenever you think about AI and
investments let's say you go and work in investment mode the eye can show you how variables
are moving in relation to each other but if you want to invest if you want to actually make
money from that correlation you need to understand is there a causal relationship between the
two OK so This is why a lot of investment analysts I think their job is going to change in the
future and they're going to go from trying to identify correlation to a situation where the AI
gives them all the correlations that it finds and then the investment analyst tries to think is
there causation that's happy OK so because of that that would be an example where I think in
the future especially the investing side you will see human analysts and AI working together OK
I very good at the causation part AI very bad at the at the sorry I'm very good at the correlation
part a very bad at the OK so just keep that in mind we'll revisit that second and then lastly
within machine learning there are also many sub branches of machine learning that are out
there as well OK you've got something called neural networks without deep learning so I'll try
and talk a little bit about them today so you have a high level sort of understanding and and
now when it comes also to machine learning maybe the easiest way to think about how this
stuff works very simple level is you can think of a very easy example OK that example is let you
imagine that we have pictures of cats and we have pictures of dogs similar to the kind of point I
got before you need at the beginning for a lot of this stuff we called labeled data so the
annotators the people that have the really not fun jobs in AI are basically doing a lot of this
labeling there's a picture of the cat and we give the AI the word cat so it knows that a cat
represents is represented by that picture we then combine that label data with something
called an algorithm so the algorithm is in effect taking a lot of those labeled data that we're
giving them and trying to find a bunch of correlations then why does a cat look like a cat OK
that's what the algorithm tries to do and eventually once you've combined the algorithm with
the labeled data you get something called a training machine learning OK now one of the very
important things to keep in mind whenever you have output something change machine
learning model you always get a conditional probability with that OK meaning that if I put in a
new picture of an animal it will make a decision cat or dog will actually give me a confidence so
keep in mind that whenever you have output there's numbers of the I sure right the AI will be
sure of it but it will also have a percentage So what a lot of companies do is they create a
threshold and they say if the AI is 80% or more confident in something then assume the AI and
the AI is less than 80% confident then maybe pass it to a human being OK so when a lot of
applications in finance because you want the high level of confidence you can put in a threshold
and because you're trained machine learning model gives you a percentage you can then
specify those rules higher than the the the sort of confidence level like something decision
lower than the confidence level I don't expect OK so if that kind of makes sense then what I
then wanted to do is show you one of those we call low code and no code tools OK so let me
just bring it up here going to be looking at it just in this way OK so basically what we have here is
we have something called an image classifier OK it's actually the tools teachable machine by by
Google but again as many of you said that you did program before I wanted to show you one or
two tools that very easy for you guys to use OK so this would be an example of an image
classifier So what you do here is you basically have what we call classes but you can think of it as
like a bucket OK and then you have to give the buckets different titles and in that title you
basically then give it data so the way it is rather than using cat and dog

One final piece in terms of the theory on on AI and I promise that this is probably the slide that
has the most amount of words right so I like visual slides but there is three different areas of
training your machine learning models if you want to check out high level categories OK there's
a few other ones and those falling tree are supervised learning unsupervised learning and
reinforcing so you think about supervised learning supervised learning is actually training a
machine results from specific input to specific output OK so if you think of the cat and dog the
idea with with the training and machine learning model to give a picture of a cat and then have
it come up with the word cat it's basically a supervised learning give it specific input I want
specific output OK now although that is useful that's not really exciting so for me the most
exciting part of AI is actually the unsupervised learning and the unsupervised learning part what
happens is we give the AI a ton of data and then we ask the AI come up with something
interesting I don't specify the output I just say come up with interesting stuff from your
observations of the data and that's interesting because often the AI will look the data very
differently to human beings and I'll show you some examples later on but the idea with
unsupervised learning is we start to get insights from the AI that human beings never thought
about before so that I think for a lot of clients and a lot of finance I would say investment firms
they find that interesting supervisor now the third one is something called reinforcement
learning and we do see a little bit of this also used have a lot of investment firms as well and the
way I want you to think about reinforcement learning is think of it like training a little baby OK
and when the baby does something good you give the baby candy when the baby does
something bad I guess depending on how you parent your kid but you can either you know
smack the kid or you can tell the kid go send the corner and you get time out right but the idea
behind reinforcement learning is that you incentivize good behavior and you disincentivize bad
behavior OK so the the the the model learns that way now that tends to be a little bit more
resource intensive because that's to do it again and again and again you have to give it feedback
I like and I don't like it I like it I don't like it I like I don't like it but that is another way to also train
your model now within reinforcement learning a lot of AI companies are using it because not
only is it about training one baby but you can start to actually train baby against another baby
OK so then you have these two strategies that gets better and better and better and therefore
we think about trading right trading strategies are effectively one trader against another trader
right if you can make those two strategies better and better better you make both of the traders
better on both sides of that equation now it's it's theoretical the way I said it so I want to show
you something that a company called open AI it's the same company that actually made BT they
actually come up with a couple of very interesting AI I would say AI reinforcement learning
examples and one of the reinforcement learning example is actually training their AI model to
play hide and seek against each other if you guys can hide and seek when you're a kid but
basically the way it works is there's like the hiding team and the seeking team right and so when
the beginning the seeking team like closes their eyes and counts to 10 and then the hiding team
hides somewhere the goal is the guys who are seeking have to find the people who are trying to
hide OK so that's how the thing works so when it comes to reinforcement learning the guys at
open AI actually kind of put this out I thought this was actually quite quite interesting so let me
go ahead and play it for you guys I'll talk to you kind of have a sense of what's actually going on
the rules of natural selection and competition led to the evolution of increasingly intelligent life
today we ask if comparably simple rules and multi agent competition can also lead to intelligent
behavior in a new virtual world these agents are playing hide and seek these agents have just
begun learning but they've already learned to chase and run away this is a hard world for a
hider who has only learned to flee however after training and millions of rounds of hide and
seek the hiders find a solution So what he's basically saying before I show you the solution is
they play the game again and again and again and again two teams two AI playing against each
the hiders learn to use rudimentary tools to their advantage by grabbing and locking these
blocks they can create their own shelter the seekers are locked in place for a brief period of the
start of the game giving hiders a chance to prepare Even so when they talk about multi agent
what they mean is there's more than one hider right so then what happens is sometimes and
there's two gaps in the doors the the hiders have to work together because there won't be
enough time for one guy to block both of the doors so two of them have to do it OK so that's
kind of step one and so the hiders must learn to collaborate accomplishing tasks that would be
impossible for any single individual the hiders are not the only ones who can learn to use tools
after many generations of failing to break into the shelter the seekers learned to jump over
obstacles using ramps OK so you start to see one getting better and getting their shelter
breached the hiders learned to take away the primary tool the seekers have at their disposal
note that we did not explicitly incentivize any of these behaviors as each team learns a new skill
it implicitly changes the challenges the other team faces creating a new pressure to adapt we've
also put these agents into a more open-ended environment randomizing the objects team sizes
and walls in this world they learn to construct their own shelter from scratch requiring that they
arrange multiple objects into precise structures to prevent seekers from using the ramps the
hiders move them to the edge of the play area and lock them in place we originally believed this
would be the final strategy that the agents learned however we found that after more training
the seekers discovered that they can jump on top of boxes and surf them to the higher shelter
in the last stage of emergent strategy that we observe the hiders learned to lock as many boxes
as they can before constructing their Fort in order to defend against box surfing so how do
agents acquire these skills they're trained using reinforcement learning and an algorithm
inspired by the way animals on earth learn and the agents play thousands of rounds of hide and
seek in parallel for many days they train against each other as well as past versions of
themselves using an algorithm called self play coevolution and competition on earth led to the
only generally intelligent species known to date humans so I'm gonna pause it there right and
the interesting part here is this is how the AI learning it's playing against itself over and over and
over again millions of times that's why the AI actually gets so good we've actually also seen AI
being used like this to play video games right so often there are some human teams that
actually try to train against AI and I don't know if you guys are video game fans in the room but
that Dota dot it's a very big for multiplayer game right and actually they had a I like train on
Dota and then they had the AI played the best human team and the humans a loss it wasn't
even close so the idea here is if you can build a good AI to be able to do training strategies using
reinforcement learning you can get to a really good result OK so just keep in mind there are
many different ways to do to do machine learning there's and I think based on the type of thing
you're doing you would then pick which of the three OK so you were saying before like people
who work in AI get get really rich right part of the reason they get really rich is they know what
to use when right and this is the idea of thinking of AI as a tool to achieve an objective you then
figure out when you're actually using this stuff what tools should you use for what specific type
of objective OK so again three main types of training within machine learning supervised
learning unsupervised learning and then reinforcement so the example that we saw before was
again an example of supervised learning right because I gave it the the training so I gave it the
output HKU HKUST and then I said when I give you a future picture you need to give me the
correct label either hku or hkust OK so that would be an example of using supervised now when
it comes to applications in finance I do want to show you a few we see quite a few of the banks
out there actually using a lot of machine learning to better predict people's risk tolerance OK
when I say risk tolerance what I actually mean is effectively it's trying to judge how risk of
course you are or how risk seeking you are OK and you can use data about people to actually
figure that out now historically what they would do is they would give people survey and they
would say rank like answer a few questions and then based on that you they would decide how
risk averse or how risk seeking OK so to do that kind of to give you an example of what that
looks like let's play a very quick game I'm going to give you two options option one is I give you
50 bucks OK no question asked I just give you 50 you walk out you go buy yourself a copy then
option B option B says I take a coin I toss the coin if it gets heads I give you 100 OK if it goes tails
I give you 0 right now if you calculate this in terms of expected value in probability expected
value is still 50 bucks OK so option a I give you 50 bucks option B you play the game so how
many of you here would take the 50 bucks just raise your hands wow you guys are very risk
averse fantastic OK how many of you would play the game with me so very few of you right
again that's the idea when they actually do this in the old way that's how they decide that right
but they may give you you know 25 they might give you 50 that might give you 75 just check
where you are but in essence that's what they're doing in the manual way OK but I also notice
when I go home on the MTR there's a lot of old things that are trading stocks OK and to me
that's sometimes a little bit scary right but it also means that even though the older lady or the
older person might be in the position with save money they still actually are taking on a lot of
risk and that's the danger so often what that what happens with AI is they not only look at kind
of the survey answer they look at data about you right so they see what are your behaviors do
you go skydiving do you do like crazy stuff right and if you do more crazy stuff then chances are
you're list tolerance is higher and then they can based on that put you in a more higher risk
tolerance if you are from higher risk tolerance buckets then they can actually sell you more risky
investments OK so some of the AI is doing the investment selection so the AI is actually involved
in putting you in the right risk category and that's actually what machine learning find the
pattern about this person what do they do in their life what do they do in their transactions and
then predict the outcome based on what is their past history OK so a lot of risk tolerance we
actually see quite a few examples where banks are trying to do this to better predict people's
risk tolerance well keep in mind I think from the machine learning perspective it's kind of
pattern and then it takes the outcome based off of that pattern now when we then start to talk
about you know machine learning sort of the next sort of level if you like is something called
deep learning OK so there's machine learning and then one of the subsets of machine learning
is something called deep learning now deep learning uses something called a neural network
OK we can actually kind of go into that a little bit I think neural networks are also very
interesting and neural networks are basically modeled on structures that we have in the brain
OK so basically in our brains you have a nerve cell and basically what happens is you have input
into the nerve cell something happens in the nerve cell and then there's an output OK it's
actually very similar with the neural network simply get input there's some sort of process and
then you find them and they get an output OK the reason why we call it deep learning is
because for the very intensive tasks you don't only have one layer of process you have many
layers of process and because you have many layers of process the difference is you have many
different connections and also the number of connections increases exponentially as you have a
bigger neural network OK so therefore because you have to train this model at the beginning
and also when you run it you have to you have more connections their cost of a deep learning
network is actually a lot higher but what that also means is your accuracy goes up as well OK so
that's kind of the thing to keep in mind whenever you have these things called neural networks
it's input process output and that is what's happening over and over and over again more
processed layers you have the better your accuracy is ultimately going to be OK so keep that in
mind that's kind of the general the general problem now you might be asking what is the
application of this where would you typically use neural networks and the answer is in many
cases neural networks is used for image processing OK you basically have an image something
comes in and it does some sort of process and it gives you an output OK now it's kind of easy for
me to sit here and theoretically though talk about that so what i want to do is i want to then
show you an example