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- 🔆 Shortcuts and Side Effects: AI’s Hidden Tech Debt
🔆 Shortcuts and Side Effects: AI’s Hidden Tech Debt
Increased hallucinations, fake AI, and how to manage scaling tech debt.
Allegra Guinan & Emma G Moller
April 24, 2025
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🗞️ Issue 67 // ⏱️ Read Time: 5 min
Hello 👋
AI is transforming businesses fast, but it’s also creating a hidden challenge: technical debt. Companies rushing AI adoption often take shortcuts, causing problems down the road. This debt can slow innovation and hinder maintenance if not managed carefully. Let's explore what it means, why it matters, and how to deal with it.
In this week's newsletter
What we’re talking about: The rise of tech debt in the AI era, and how to handle it.
How it’s relevant: AI tools are now some of the highest contributors to tech debt, making it a board-level concern impacting innovation, agility, and competitiveness.
Why it matters: Technical debt impacts innovation speed, reliability, and competitiveness. Managing it grants agility and cost-efficiency advantages; ignoring it increases risks of complex, hard-to-maintain systems.
Big tech news of the week…
🛒 The founder of Nate, a startup that claimed to use AI to simplify online shopping, has been charged with fraud after investigations revealed the app’s “AI-powered” automation was actually performed by human workers in the Philippines. This Mechanical Turk-like case highlights concerns about companies exaggerating AI capabilities to attract investors.
🧬 Most genetic research relies heavily on data from people of European ancestry, leaving other populations underrepresented and limiting the effectiveness of precision medicine. A new AI method, PhyloFrame, corrects this bias, improving disease prediction for all groups, especially those previously overlooked, by integrating diverse genetic data. These results demonstrate how equitable AI approaches can contribute to equitable representation in medical research.
🦺 Geoff Ralston, former Y Combinator president, launched the Safe AI Fund (SAIF), supporting startups developing AI safety, security, and responsible deployment tools, focusing on technologies that mitigate risks and establish guardrails for trustworthy AI.
😵💫 According to OpenAI’s own testing, their newest reasoning models (o3 & o4-mini) hallucinate more often than their previous reasoning models (o1, o1-mini, and o3-mini) as well as their traditional, “non-reasoning” models, such as GPT-4o. Results show o3 at 33% hallucination rate and o4-mini at 48%. OpenAI notes "more research is needed" on why this is worsening.
What is Technical Debt?
Technical debt (a.k.a tech debt) is like taking a shortcut to finish a project faster, knowing you’ll have to fix or improve things later. In software, tech debt happens when teams choose quick fixes or simpler solutions to meet deadlines or launch products faster, instead of building things the best way from the start. And we all know the tech industry likes to “move fast and break things.”
Sometimes, taking on some debt helps achieve urgent goals. But, just like financial debt, tech debt “accrues interest.” Left unaddressed, it takes more time and resources to fix, slowing future progress.