British soldiers take part in a Nato exercise on the Estonian-Latvian border. Getty
British soldiers take part in a Nato exercise on the Estonian-Latvian border. Getty
British soldiers take part in a Nato exercise on the Estonian-Latvian border. Getty
British soldiers take part in a Nato exercise on the Estonian-Latvian border. Getty

AI is 'transforming modern warfare' and more experiments are needed to prepare for future


Laura O'Callaghan
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Artificial intelligence is transforming the way war is waged in the 21st century and further integration of such technology is needed by militaries, a report has suggested.

Experts at the Royal United Services Institute (Rusi) and QinetiQ, a security and defence contractor, said military commanders in the future should be ready to work with AI to better respond to crises.

The report laid out how trust in AI among military officials, political leaders and the public is essential for it to flourish in the defence arena.

The authors argued that the natural instinct of human operators is to intervene “even in situations where the AI is better placed to make a decision”.

“AI is already transforming warfare and challenging long-standing human habits,” the report stated.

“By embracing greater experimentation in training and exercises, and by exploring alternative models for C2 [command and control], defence can better prepare for the inevitable change that lies ahead.

“The traditional response to the acceptance challenge posed by the military use of AI has been to insist on humans maintaining ‘meaningful human control’ as a way of engendering confidence and trust.

“This is no longer an adequate response when considering both the ubiquity and rapid advances of AI and related underpinning technologies.

“AI will play an essential, growing role in a broad range of command and control (C2) activities across the whole spectrum of operations.

Having to make lightning-fast decisions is part of the job of a military commander, and the use of AI at such crucial times would help rather than hinder the individual, the authors said.

Earlier this week the UK's new army chief said British troops must be prepared to fight in Europe.

Alternative models for command and control could also be explored if AI is widely adopted within a military, the report suggested.

The report touched on the lack of trust humans are conditioned to have in machine-generated intellect, arguing “a careful balance” between trust in and control over AI operations is needed for it to be successfully used.

“Under-trusting can be as risky or counterproductive as over-trusting,” the report said. “In fact, just as absolute control is rare, so is absolute trust.”

Co-author Christina Balis, QinetiQ campaign director for training and mission rehearsal, said: “The growing military use of AI for operations and missions support will transform the character of warfare.

“This is not just a question of adapting our armed forces’ tactics; we need to fundamentally rethink the role of humans in future military decision-making across the spectrum of ‘operate’ and ‘war fight’ and reform the institutions and teams within which they operate. It requires that we rethink the notion of trust in human-machine decision-making”.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Updated: June 23, 2022, 1:55 PM