Reviewed by Irfan Ahmad.
Microsoft CEO Satya Nadella says organizations should retain ownership of the knowledge they create while using artificial intelligence, arguing that businesses risk revealing proprietary know-how as they use AI systems.
In a July 12 essay published on Scratchpad, Nadella introduced what he calls the "Reverse Information Paradox." He said the concept builds on economist Kenneth Arrow's "Information Paradox," but shifts the concern from sellers of information to organizations using AI.
Nadella argued that companies effectively pay for AI in two ways. "You essentially pay for intelligence twice, once with money, and again with something even more valuable: the proprietary knowledge you must reveal to make that intelligence useful.", he wrote.
According to the essay, AI models learn from prompts, the tools agents use and, especially, the corrections people make when a model produces an incorrect response. Nadella wrote that every correction is "distilled into institutional know-how," which he described as knowledge that organizations should be able to keep under their own control.
He said enterprises should retain ownership of their organizational memory, traces, feedback, decisions and institutional context. Nadella also argued that companies should be able to use outputs from their own AI tasks and queries to fine-tune or train models within their own learning environments.
The essay recommends that organizations create private evaluation systems, build proprietary learning environments within their tenant boundaries and keep their orchestration layer independent of any single AI model. Nadella said that would help organizations continue operating with other models if any one model were taken away.
Nadella also addressed model distillation. While supporting the ability of AI developers to train models on public data under fair use, he wrote that he finds it "ironic" for model providers to restrict distillation while reserving the right to learn from customer usage and interaction data.
He concluded that organizations should be able to benefit from AI without giving up the knowledge they create through using it.
"In consuming intelligence, you are creating intelligence.", Nadella wrote. "And what you create should belong to you."
Image: Roman Budnikov - Unsplash
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Microsoft CEO Satya Nadella says organizations should retain ownership of the knowledge they create while using artificial intelligence, arguing that businesses risk revealing proprietary know-how as they use AI systems.
In a July 12 essay published on Scratchpad, Nadella introduced what he calls the "Reverse Information Paradox." He said the concept builds on economist Kenneth Arrow's "Information Paradox," but shifts the concern from sellers of information to organizations using AI.
Nadella argued that companies effectively pay for AI in two ways. "You essentially pay for intelligence twice, once with money, and again with something even more valuable: the proprietary knowledge you must reveal to make that intelligence useful.", he wrote.
According to the essay, AI models learn from prompts, the tools agents use and, especially, the corrections people make when a model produces an incorrect response. Nadella wrote that every correction is "distilled into institutional know-how," which he described as knowledge that organizations should be able to keep under their own control.
He said enterprises should retain ownership of their organizational memory, traces, feedback, decisions and institutional context. Nadella also argued that companies should be able to use outputs from their own AI tasks and queries to fine-tune or train models within their own learning environments.
The essay recommends that organizations create private evaluation systems, build proprietary learning environments within their tenant boundaries and keep their orchestration layer independent of any single AI model. Nadella said that would help organizations continue operating with other models if any one model were taken away.
Nadella also addressed model distillation. While supporting the ability of AI developers to train models on public data under fair use, he wrote that he finds it "ironic" for model providers to restrict distillation while reserving the right to learn from customer usage and interaction data.
He concluded that organizations should be able to benefit from AI without giving up the knowledge they create through using it.
"In consuming intelligence, you are creating intelligence.", Nadella wrote. "And what you create should belong to you."
Read next:
• Researchers Examine Why Digital Content Creators Struggle to Speak About Burnout Amid Platform, Audience and Work Pressures
• AI chatbots lack consistency in financial advice, according to new UGA study
