MON AM News: Computer science expert predicts sweeping disruption from AI; Fraser Industries to boost production with new investments, CEO says

April 22, 2024

— A computer science expert with UW-Madison predicts AI advancement will lead to massive disruptions in the “social fabric” of the country and world, in much the same way as the industrial revolution did more than 200 years ago.

Prof. Patrick McDaniel, the Tsun-Ming Shih Professor of Computer Sciences in the university’s School of Computer, Data and Information Sciences, shared his outlook on the fast-growing technology during a recent Wisconsin Alumni Foundation webinar.

His experience in this area includes working on a national strategy document around AI for the White House in 2017, when the potential for the technology was becoming more clear.

“What we’re seeing is the beginning of what we call social disruption … What we’re going to see is a change in the very nature of work,” he said last week.

Just as the transition from a largely agricultural society to an industrial society led to a huge boost in productivity starting in the late 1700s, McDaniel says market forces resulting from AI being much cheaper than human labor will do the same across many industries. These include health care, finance, insurance, marketing, education, e-commerce, manufacturing and transportation.

“I wouldn’t look at this as simply a loss, but this is a recalculation, a recalibration of our society. And perhaps leading to a renaissance,” McDaniel said. “What if we could spend much more of our time, the vast majority of our time, in more creative, more inventive, more innovative endeavors?”

He said AI being applied to labor-intensive industries like trucking will help drive this trend, along with national policies aimed at helping the economy handle the rapid changes he foresees.

But at the same time, AI is also being applied in the creative realm, as generative software can produce text, pictures and even videos that are increasingly difficult to distinguish from what’s real.

“This will change the nature of creation, and it will create new opportunities for immense innovation in things like entertainment,” he said. “But it has some downsides, because we have to worry about things like propaganda.”

And though he conceded that outsourcing certain tasks to smart software will lead to a loss of human expertise gained through experience, McDaniel noted AI will always need to be fed new information and maintained by people.

He argues the technology “can be extraordinarily fragile” and vulnerable in certain situations, and is far from infallible. For example, AI will often reproduce the biases inherent to human decision making when trained on datasets that are heavily influenced by people, he said.

“Just handing it over to AI is kind of a popular cliche, but that’s not actually the way AI is going to play out in practice,” he said. “What’s going to happen is … we’re going to get better at watching the AI evolve, and as we do that, we’re going to become much better at thinking about expertise in a broader context.”

Still, he expects workers “in the lowest skill levels” of the economy will be affected the most by AI-enabled automation.

“Amazon can spend what they paid one employee a year for to buy a robot that never sleeps, never strikes and lives for some 10 years … so the economics are overwhelming, and so what we’ll see is that massive displacement,” he said.

Watch the full discussion here.

— Fraser Industries CEO Patrick Kelly says new investments will boost boat production and Great Lakes freighter repair operations while preparing the shipyard to play a role in Blatnik Bridge reconstruction in Superior.

Kelly told WisBusiness.com he’s bound by confidentiality agreements and cannot say exactly how much funding the parent company of Superior-based Fraser Shipyards secured in a bond investment. The 134-year-old shipbuilder has contracts with the U.S. Navy and other military branches as well as various police and fire departments across the country. But Kelly in December told Wisconsin Public Radio the company planned to secure $40 million in funding.

The new funds will speed up boat construction by investing in new aluminum and steel cutting tables used for trimming large pieces of metal into boat pieces. The company is also buying new portable cranes and installing overhead cranes in facilities that didn’t have them.

Kelly said that all adds up to a higher quality final product and more efficiency, which should help increase the current new production rate of 2-3 boats, ranging 35-60 feet, per month.

“You know you can negotiate the best agreements in the world, but you’ve got to be able to turn it over to the shop floor with confidence that the parts have been cut properly,” Kelly said. “The materials are there on site and ready to go into the vessel. And part of our funding goes into that entire process.”

While Fraser doesn’t manufacture new ships much larger than 200 feet, repairing Great Lakes freighters larger than 1,000 feet long is a major part of the plan, Kelly said.

The MV Paul R. Tregurtha, the longest Great Lakes freighter right now at 1,013 feet, and the M/V Lee A. Tregurtha, which is 826 feet long and helped allies in the Pacific and Atlantic oceans during World War II, were docked at Fraser this winter for repairs.

Kelly said the investments to improve quality and efficiency will help the repair side of business too, but the company is also investing in welding and other basic engineering programs at local technical colleges to improve the workforce. The company last year projected its Superior headcount will rise to 375 from around 200 in 2022. The tradespeople working on the largest ships in the Great Lakes need to be top-notch, Kelly said.

“Our guys and gals always need new tools and equipment on the repair side, just like they do on the new build side,” Kelly said. “I’m gonna brag a bit about our employees. You know, I think from the external world in, what you expect to see in the shipyard are welders and folks that are kind of rough and ready. These folks are more like artists honestly.”

The company is also hoping the investments to expand its shipyard operations will also help better position it to assist in the Blatnik Bridge reconstruction project, which is currently in the preliminary design phase. Fraser Shipyard is located directly next to the bridge and the company has already met with Wisconsin Department of Transportation Secretary Craig Thompson and Wisconsin Economic Development Corporation Secretary and CEO Missy Hughes.

Kelly said support from Thompson, Hughes and local government officials was crucial in securing the latest round of funding.

“Lenders and the bond markets that we’re tapping into, they absolutely want to know that there’s a supportive political environment around the places that they’re investing in,” Kelly said. “And it’s one of their diligence items. If they sense that there’s resistance or lack of support, they’ll dig pretty deep into that before they’ll lend. And in this case, there’s a very supportive community around us and we don’t take that for granted.”

Fraser’s lobbyist, John Jacobson, said the shipyard is poised to use its fabrication and material handling resources to assist in the bridge work. He said DOT is already interested in using the shipyard’s on-shore space to temporarily store construction materials and take advantage of its fabrication capabilities.

“Fraser intends to work directly with them to see if there are any opportunities where we could use materials that are coming off the bridge to sort of repurpose and recycle and make things a little bit more efficient for the bridge rebuild, but then also having to haul away a lot of the materials that could be repurposed at the yards,”

See past coverage of Fraser investments.

— HealthX Ventures founder and Managing Partner Mark Bakken is among the winners of UW-Madison’s 2024 Chancellor’s Entrepreneurial Achievement Award.

The awards program recognizes people with ties to the university who have contributed to “economic growth and social good” through entrepreneurship.

“I am delighted to recognize three outstanding members of our Badger community who are shepherding life-changing innovations into the world, all while creating jobs, economic impact, and social capital,” Chancellor Jennifer Mnookin said in a statement.

HealthX Ventures, a venture capital firm focused on digital health care, has raised $137 million and invested in 34 companies since 2015, according to the university’s release. Seventeen of those businesses started in Wisconsin.

Meanwhile, Bakken has personally invested in 11 different venture funds and more than 80 startup companies. UW-Madison says his portfolio companies have collectively raised more than $1.1 billion.

Another awardee is James Dahlberg, professor emeritus of biomolecular chemistry with the university. After joining the university’s School of Medicine and Public Health in 1969, he went on to co-found Cambridge BioTech Corp in the 1980s and Third Wave Technologies in the 1990s, which was sold in 2008 for $580 million.

That company’s intellectual property was later licensed by Madison-based Exact Sciences, the release shows.

The third awardee, YMCA of Metropolitan Chicago President and CEO Dorri McWhorter, is a graduate of the UW-Madison School of Business. She previously worked as a partner in the accounting firm Crowe LLP and held senior positions with Kenosha-based Snap-on Incorporated and Booz Allen Hamilton, a consultancy headquartered in Virginia.

See more on the recipients in the release.

— The Universities of Wisconsin is promoting career paths focused on sustainability and environmentalism for Earth Day while touting its roots in the state.

Earth Day was created in 1970 by Gaylord Nelson, who served as Wisconsin governor and later on in the U.S. Senate. In the following 10 years, the Environmental Protection Agency was created and major environmental legislation led to the enactment of the Clean Air Act and Safe Driking Water Act.

As a leading environmentalist at the time, Nelson helped drive the notion that environmental health and economic prosperity need not be in opposition, according to a recent UW blog post.

The post notes green jobs are available in industries such as renewable energy, energy efficiency, natural resource conservation and waste management. It highlights specific jobs including urban planner, wildlife conservation worker, environmental engineer, forester, soil scientist and others.

Amy Carrozzino-Lyon, scientist and program director for the Biodiversity Conservation and Management Program, says the discipline of conservation touches many fields that relate to the land, water and environment.

“Whether you are engaged in agriculture, sustainability, wildlife or fisheries management, or environmental education and outreach, we all work on the same team,” she said in a statement.

Cooking with gas: Kwik Trip expansion to benefit Wisconsin’s economy

Wisconsin has money for mental health crisis centers. That’s step one.

TOPICS

AGRIBUSINESS

– Record cheese auction funds dairy industry future

– Gardeners need to adjust as hardiness zones shift in Wisconsin

CONSTRUCTION

– Sky’s the limit for solar projects across Wisconsin

– Waukesha County Exec calls for expansion of I-94 and Highway 164

EDUCATION

– Climate justice top of mind for UW-Madison students on Earth Day

– University of Wisconsin-Madison to install new and stronger pier after last year’s collapse