An anonymous donor has made a $21 million gift to support the groundbreaking work of the Center for Applied Artificial Intelligence (CAAI) at the University of Chicago Booth School of Business. This investment will provide CAAI with current-use resources as well as an endowment to accomplish even more in this burgeoning field.  

Launched in 2019, CAAI is Booth’s newest research center and focuses on how machine and human intelligence can be combined to create new ideas. It strives to create real-world impact in a wide range of areas of business and policy through cutting-edge research using machine learning, which analyzes complex data at higher volumes and in different ways than is possible for humans.

“Chicago Booth is incredibly proud of the CAAI’s pathbreaking, interdisciplinary research applying human insights to AI to bring about a better world,” said Madhav Rajan, dean and the George Pratt Shultz Professor of Accounting at Booth. “This generous gift will allow the school, through the work of the center, to have continued and lasting impact on the fields of finance, health care, public policy, education, and behavioral science.”

CAAI is led by faculty director Sendhil Mullainathan, the Roman Family University Professor of Computation and Behavioral Science, who joined Chicago Booth in 2018 after teaching at Harvard University and the Massachusetts Institute of Technology. Mullainathan is the recipient of a MacArthur Foundation fellowship, commonly known as a “genius grant,” and has been designated a Young Global Leader by the World Economic Forum. The center’s Steering Committee brings together researchers from multiple areas at Chicago Booth, including marketing, econometrics and statistics, behavioral science, and economics.

“The field of applied AI is rich with opportunities to generate new knowledge and solve old problems, and, with this gift, we can do more to push the boundaries of the field,” Mullainathan said. “Humans and machines thinking together is the future of science, and this gift cements the center as a hub for inquiry and research into this important area.”

“This generous gift will allow the school, through the work of the center, to have continued and lasting impact on the fields of finance, health care, public policy, education, and behavioral science.”

— Madhav Rajan

A paper summarizing CAAI research recently received a Responsible Business Education Award from the Financial Times for academic research with impactThat research discovered large-scale racial bias in the algorithms used by insurers to predict the health-care needs of millions of US patients. CAAI researchers analyzed how patients were identified for a program offering extra medical support to people at high risk. Assuming past health-care costs indicated need, the algorithm overlooked the fact that Black patients cost the system less because they lacked access to or received lower levels of care, unfairly reducing by more than half the number identified for additional help. Based on this research, CAAI researchers developed a free online Algorithmic Bias Playbook for senior corporate executives, policymakers, and technical specialists in health care. The playbook has been downloaded and shared hundreds of times.

CAAI researchers have also studied the criminal justice area, finding that judges’ decisions about whether to release or detain an individual pretrial are affected by the faces they see in mug shots. Beyond the obvious features, like gender or skin color, the algorithm found that there are some additional features humans are predisposed to view favorably—like a clean-shaven or a rounder face—and that these predispositions can influence a judge’s decision. CAAI researchers were eventually able to predict, with 70 percent accuracy, what a judge’s decision would be—half of the model’s predictive power was driven by the mug shot alone.

While CAAI has already achieved much success, Emily Joy Bembeneck, the center’s director, believes the gift sets CAAI up for even greater future impact. One of the initiatives that could be made possible through this gift is the enhancement of the center’s resources beyond the classroom, such as the possibility of offering a library with additional assets to serve a much wider community.

“Ten years ago, people were not thinking about artificial intelligence and machine learning as they are now,“ Bembeneck said. “But it impacts every avenue of our lives. Algorithms use information about where we live, where we work, who we talk to, and what we like to guide decisions. From something as major as whether you get a mortgage or are admitted to a health-care program to something perhaps as trivial as what you see on social media, algorithms are there behind the scenes. Our role at the center is to understand how algorithms and humans together can make better decisions, and to help business and policy leaders apply those insights in ways that help make the world a better place.”

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