Rising oil prices, Use of AI in Kenosha Business Spotlight
Concerns about rising oil prices and the growth of AI took center stage in a recent presentation to Kenosha-area business leaders.
Dominic Ceci, Johnson Financial Group chief investment officer, addressed those issues during a presentation at the Kenosha Country Club.
He discussed the current price of oil and how it compares to historic prices. Ceci said that while some places are going to feel the impact of oil rising to $100 a barrel, it may not be that bad of a situation.
He said there have been several points in the past where oil prices have been high, including in the 1970s. In today’s terms, he said barrel prices would have to reach $160 to be close to what happened in the ’70s. Many things, including cars, have become more efficient than they were 50 years ago.
The rate of inflation also offers insight into how bad prices have been in the past. Ceci said when he looked at 2008 oil prices in today’s dollars, the price per barrel was $200.
“If you look at that historical perspective, it’s really not all that bad (now),” he said.
Ceci said he’s spoken to economists about the issue and learned that if oil were to rise to $150 a barrel and remain there for six months, there would be substantial economic damage.
Impact of AI
AI use will have an impact, but it may not be what people expect, Ceci said, adding AI is turning into a big economic driver but isn’t going to replace human jobs.
For example, he noted that Claude Opus, one of the most prominent AI models, has a “hallucination” rate of 60%.
“It won’t tell you that it doesn’t have an answer; instead it will make up an answer,” Ceci said. “It’ll tell you things like penguins can convert moonlight into solar energy.”
That shows AI can’t entirely replace jobs, Ceci said. People have to look things up to confirm them.
Joe Maier, the senior vice president director of wealth strategy at JFG, said an AI hallucination rate of 60% means it’s wrong more often than it’s right. Maier said AI also lacks one key skill that humans have: problem solving.
“The nature of being a human is the ability to solve problems,” he said. “The problem solvers in your life are probably some of the most valuable people you’ve found, and that’s a human, not AI.”