Citigroup just hired a brilliant consultant called Watson to build out its digital banking. This very same Watson also advises healthcare companies such as WellPoint and, in his time off, took the top prize last year on Jeopardy!, the television quiz show. According to his friends, Watson has other corporate gigs that he is coy about, and will soon earn more than $1bn annually. His astronomical income puts him in the top 1 per cent of the top 1 per cent of all American workers. Or rather, it would if he were human. He is a machine.
It is worth contemplating the rise of this IBM supercomputer amid a fraught election season. Out on the campaign trail, Republicans promise to bring jobs back by reining in the government and bashing China. Barack Obama counters with a mirror-image populism, blaming the super-rich for the troubles of ordinary workers. Watson stands as a reminder that something more profound is happening. We are in the midst of a technological upheaval; and financial rewards are flowing to the elites who create and control the new machines. Almost everybody else is threatened – including sophisticated bank executives at Citi and WellPoint’s healthcare analysts.
Watson is the standard bearer of a formidable army. Thanks to the relentless arithmetic of Moore’s law, the latest Intel chip contains 2.6bn transistors, a million times more than the path-breaking Intel 4004 of four decades ago. The cost of computer storage has fallen about 90 per cent in just six years, according to Martin Barnes of BCA Research; today’s transistors are so tiny that you can fit 3,000 of them into the width of a human hair. As a result, companies can store and analyse information on every aspect of the world around them. The era of Big Data is at hand.