The beginnings of AI / IA (intelligences, intelligent people and smart alecks, 1970?)

Since the first time I heard the neologism “AI” as an abbreviation for “Artificial Intelligence”, it did not sit well with me. Initially, it seemed to me a translation error, then the term, probably of North American origin, began to be adopted worldwide. Since “artificial intelligence” is something that does not exist and, God willing, will not exist, it remained in the air what one meant by that. It seems that the correct thing would be to say “Intelligent Automatism - IA”, as some say, or “Computational Intelligence” (CI in English), as I have heard academics say, so it seems I am not alone in finding the name AI mistaken. AI is, at the very least, an error of vernacular in any language.

Thinking about this, and as one-thing-leads-to-another, I remembered an episode from about 55 years ago (1970?), which I record in this writing as the beginnings of the problem: at that time, commercial computers were beginning to appear on the market. In practice, the “programs” were all customized, made by specialists, FORTRAN-MONITOR and COBOL language, which translated the commands into the primary principles of the binary language of electronics, the root of computing, as it is to this day. These “programs” were introduced by means of “punched cards and tapes” through typed commands, which the machine “read”. There was one, called IBM360, considered the ultimate thing of the time (with less capacity than my mobile phone today and occupying a room of ±30 m²).

Financial institutions (banks) were ecstatic. That would put an end to the enormous volume of manual entries (pen on paper), subject to many errors and many frauds. They barely realized that the era of fewer errors and fewer embezzlements was beginning, but also the era of big errors and big embezzlements.

It was around that time that the old Bank of the State of Guanabara (BEG), later BANERJ, bought some of those IBM360s and computerized the entire service in the new, modern and imposing building of the new headquarters, in “exposed-reinforced-concrete-varnished-with-epoxy”, on the corner of Rua México, Rua da Ajuda and Av. Nilo Peçanha, in Rio. Wonderful!

Four years after the system had been implemented, a branch manager received a client, indignant over the disappearance of one cruzeiro cent from his account. At the time, Cr$ 0.01!

“Annoying” client! Just one cent? Some rounding, a repeating decimal!

Searching here, searching there, the manager and the client were very “annoying”, they went deep, until the bank discovered that a programmer had introduced a sub-program which, on even days, took one cent from odd-numbered accounts and automatically deposited it into an account belonging to that “programmer” and, on odd days, took one cent from even-numbered accounts, with the same destination. It was an “intelligent automatism”, or, if you prefer, in the fashionable language (2025), an AI created by the programmer. From then until now, the computers, the programs and the programmers have been improved.

Why was it discovered? Because there is always someone smarter, more attentive, more careful, more meticulous, more diligent or more “annoying”! And the world does not live by “intelligence” alone.

It was discovered mainly because of “greed”! He was already a millionaire, he could have stopped.

If he had stopped, he would never have been discovered, but the feeling of impunity, the taste for risk, in short, human nature, did not allow it. It almost seems that, if he were not “caught”, it would not have been fun! What was missing was recognition for his genius, for his “natural intelligence”.

I did some little calculations to assess the damage: let us suppose that BEG-BANERJ had 1,000,000 accounts in the country (there were 333 branches). Supposing it were today, US$ 1.00 ~ $ 5.00. Considering that the North American dollar (the US$) has devalued 7.75 times since that time until today, 2025 (I checked it by gold). Considering 230 business days in the year, it results, in updated values (2025), that:

1,000,000 account holders / 2 x ((0.01/5)7.75) $ x 230 days/year = $ 3,750.00/day x 230 = US$ 1,782,500 / year

In 4 years: US$ 7,130,000.00 (2025) or R$ 35,000,000.00 (2025).

In other words, since the introduction of computing, we have been in the hands of programmers. There is no natural or artificial intelligence that can fix that. But compared to the white-collar types, all within the law, it was a trifle.

Let it be recorded.

Miguel Fernández y Fernández, engineer, chronicler and columnist, member of the National Academy of Engineering and of the Institute of Engineering # written on Oct 26, 2025 R2025 Oct Rf, 4,213 characters.