From Tea Leaves to AI: Why Today’s High-Tech Predictions Are So Dangerous


Editors’ note: Welcome to CNET’s new series of guest columns called Alt View, a forum for a diverse array of experts and luminaries to share their insights into the rapidly evolving field of artificial intelligence. For more AI coverage, check out CNET’s AI Atlas.


“How are you using AI?” I asked a class full of executives. Some of the answers I have heard before: health professionals using it to read medical images; managers using it to draft emails; a retail company using it to take notes in meetings before giving up on it when they realized that the AI confabulated and had no understanding of context. And then, a gem. There’s almost always a gem. 

“I use chatbots as fortune tellers,” said a middle-aged Asian woman with a beige cardigan and white sneakers. I would later learn that she has built a billion-dollar empire. A nervous rustle spreads throughout the room as people shift uncomfortably in their seats. “Just like we used to read tea leaves, you can ask AI about the future, and it can be surprisingly accurate. For example, it recently correctly predicted a 2% rise in the stock market,” the student said, nodding and looking around the room while her classmates avoid eye contact.

A glowing translucent lightbulb, held by a hand, in front of lighted lines suggesting a circuit board

Today’s ruling soothsayers are no longer astrologers, astronomers, sociologists or even economists; they are computer scientists, data analysts and engineers. Algorithms are the new tea leaves, animal entrails and stars through which we hope to catch a glimpse of the future. 

We tend to associate predictions with knowledge, but all too often, they are closer to the realm of power. Prophecies are the boxing ring in which fights over the future take place. Our expectations bend the social world toward our predictions. When someone forecasts that the world will be a certain way, they are commanding that others obey their wishes and bring that world about. Even though we have been using predictions for thousands of years to make some of the most important decisions of our lives, we have dedicated remarkably little thought to the deeper questions about prophecy. Thousands of books have been written about how to predict, but none about the ethics of prediction.

Prediction has become a major industry. Take, for instance, platforms like Polymarket, which aggregate public expectations about future events, collecting massive amounts of data and creating influence. If 58% of users believe that the Oklahoma City Thunder are going to win the NBA Championship title, why would you bet against the majority? But the betting on these platforms extends far beyond sports or even reality TV. It has turned political instability, natural disasters and human suffering into a spectacle, dehumanizing the real-life victims, gamifying life.

Today, predictions have evolved into weapons of power that justify value-laden decisions under the pretense of facts, but predictions are never facts. Facts belong to the present and the past. An assertion about the future can be many things — an estimate, a desire, a warning — but never a fact.

What makes the future the future is that it hasn’t yet happened. What hasn’t come to pass doesn’t exist, and there are no facts about what doesn’t exist. Yet we’re using prediction more than ever with AI, prediction markets and experts talking about the future. 

The fantasy of defeating uncertainty

Pierre-Simon Laplace had a dream, often referred to as Laplace’s demon. It occurred to him that, with enough data and compute, it would be possible to achieve complete knowledge. If you knew the exact location and momentum of every particle in the universe, as well as all the laws of nature, then you would be able to predict the future with perfect accuracy. Uncertainty would be defeated at last. As Laplace put it:

Given for one instant an intelligence which could comprehend all the forces by which nature is animated and the respective situation of the beings who compose it — an intelligence sufficiently vast to submit these data to analysis — it would embrace in the same formula the movements of the greatest bodies of the universe and those of the lightest atom; for it, nothing would be uncertain and the future, as the past, would be present to its eyes.

Supporters of AI may not put it in these words, but what they seem to suggest when they enthuse about the power of machine learning plus vast amounts of data is that these technologies are bringing us tantalizingly close to realizing Laplace’s demon. If we can collect every single data point, the thought goes, and we can build enough compute to analyze that data, we can forecast what was previously unforeseeable. Such predictive power promises to revolutionize all fields of knowledge, from medicine to climate change and politics. 

AI Atlas

Driven by this fantasy, the quantifiers are tracking your every move; recording, tabulating and exhaustively analyzing your pleasures and vices; torturing your data until it screams out in confession. You are being tracked while you drive, search online, do sports, have sex, drink alcohol, do drugs, travel, sleep, talk with your friends and family, spend time on social media, go to the doctor’s office, play online games, read, watch television and breathe.

We manage and discuss our fears in quantified terms: the probability of getting cancer, or getting robbed, of earthquakes happening, or another pandemic, of climate change making our world unlivable, of another world war.

The unbridled optimism to defeat uncertainty through AI is understandable. Computers, data and statistics have brought incredible breakthroughs. The computer Bombe broke the Nazi’s Enigma cipher. In medicine, regression analysis was instrumental in identifying risk factors for diseases. Mainframe computers delivered new insights about business; centralized data processing brought real-time transaction processing and scalability. Manufacturing firms gained the ability to monitor production efficiency across entire supply chains, identifying bottlenecks and improving resource allocation. 

Personal computers emerged in the 1980s. The 1990s and 2000s saw the rise of the internet and cloud computing, further increasing data availability and processing power. The 2010s marked a turning point with the practical application of deep learning, fueled by big data and improved hardware like GPUs. Advances in algorithms paved the way for machine learning — prediction machines. 

AI and prediction: a power play

With prediction come all the patterns of prophecy and power that paper our history books. The difference is that AI is prediction on steroids, and we are using it not only on the battlefield and in the doctor’s office but everywhere, from the office to the classroom, the courtroom, our roads, our love lives and beyond. 

Machine learning algorithms are predictive machines. That is all they do, whether they are engaging in regression, classification or language. When a machine learning system translates text, it is predicting the most likely translation based on millions of examples of previous translations. When it recognizes wolves in photos, it does so by predicting the probability that a given image contains a wolf, based on patterns it learned from thousands of images labeled wolf and not-wolf. When a large language model answers a question, it is predicting what a human being would say in its place, based on the statistical analysis of books, online forums, social media and so forth.

It’s no wonder that an “oracle” is a technical term in the context of machine learning. An oracle represents the best possible performance that could be achieved; it’s an idealized function that always provides perfect predictions.

The triumph of machine learning is a corporate victory much more than a scientific one. Idealists might find it anticlimactic, even depressing. Someone wanting to put it crassly might say that we simply threw money at the problem. 

What is most remarkable about the success of machine learning is how unremarkably it came about. “What’s disappointing,” said Michael Wooldridge, professor of AI at Oxford, to a group of my MBA students, “is that it didn’t happen as a result of a scientific breakthrough.” He looked around the room to make sure the weight of his words has landed. 

From the 1960s to the early 2000s, the results from neural networks were not very impressive. The symbolic AI gang was winning the race and the grants — until it wasn’t. Something changed: We got more data and more compute, and machine learning took off. In the span of a few years, automatic translation, for instance, went from being unusable to being comprehensible, then good enough to help clueless tourists find their way with no knowledge of the local language. It’s now good enough that I admit I have sometimes preferred an automatic translation to the suggestions of a professional translator who had a weakness for verbosity. 

The amazing things that machine learning can do didn’t happen because of greater understanding. It didn’t need any genius. The picture is bleaker than an uninspiring lack of creativity. The means through which such brute force in data and compute was acquired involved theft, the exploitation of vulnerable people, a ferocious use of natural resources and building an architecture of mass surveillance, to name but a few sins.

We might be centuries away from the oracles and astrologers who predated algorithms, but prediction is still mostly about power. Power is how you get predictive algorithms, and more power is what they grant you in return.

From Prophecy: Prediction, Power, and the Fight for the Future, from Ancient Oracles to AI by Carissa Véliz. Reprinted by permission of Doubleday, an imprint of the Knopf Doubleday Publishing Group, a division of Penguin Random House LLC. Copyright © 2026 by Carissa Véliz.





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The federal tax system provides various procedural safeguards to protect taxpayers while ensuring efficient tax collection. These protections become particularly important when taxpayers face immediate collection actions while simultaneously pursuing tax credits or refunds that could eliminate their tax debt.

Many businesses have recently found themselves in this situation after filing amended returns to claim COVID-relief tax credits. In these employee retention tax credit cases, the IRS owes the taxpayer for several tax periods, but the taxpayer may owes the IRS these or other tax periods. The question arises: can taxpayers prevent the IRS from collecting while their credit claims are being processed? What if the IRS is just inept and doesn’t do its assigned job function to process the tax returns showing the credits? Should that play into this issue to the taxpayer’s detriment?

The recent case of Peoplease, LLC v. Commissioner, T.C. Memo. 2025-21, provides an opportunity to consider this situation.

Facts & Procedural History

The taxpayer in this case owed employment tax liabilities for Form 941 taxes for the quarterly tax period ending December 31, 2021. By late 2023, their outstanding liability had grown to over $11.2 million. After receiving notices about their unpaid tax debts, the IRS moved forward with collection actions by issuing a Final Notice of Intent to Levy.

The taxpayer responded by requesting a hearing through the IRS Office of Appeals, where their tax attorney explained they had submitted Form 941-X claiming the Employee Retention Tax Credit. When investigating this claim, the Appeals Officer discovered additional documentation was needed. Despite multiple requests for this information through the tax litigation process, the taxpayer never responded, ultimately leading to a determination sustaining the levy action.

Collection Due Process Rights Under Section 6330

Section 6330 of the tax code establishes the foundation for taxpayer rights during collections. This section requires the IRS to notify taxpayers of their right to a hearing before proceeding with levy actions. The statute outlines specific requirements about notification timing, hearing procedures, and permissible issues that can be raised during these proceedings.

Taxpayers who owe back taxes to the IRS understand all too well that these hearings serve as a critical checkpoint in the collection process. While these hearings can provide a remedy in some circumstances, they are not a complete remedy. The code specifically details what issues may be raised, including appropriateness of collection actions, collection alternatives, and challenges to the underlying liability in certain circumstances.

Limitations on Tax Court Authority in Collection Cases

When taxpayers pursue tax litigation involving collection disputes, they must understand the boundaries of Tax Court jurisdiction. The court’s authority stems directly from Section 6330(d), which provides specific parameters for reviewing collection determinations. This is particularly important when it comes to tax attributes, such as tax credits, from other periods.

The tax code establishes strict requirements for claiming and verifying tax credits. These requirements are particularly important when taxpayers attempt to use pending credit claims to affect ongoing collection actions. Understanding how the IRS processes credit claims helps explain why unprocessed claims cannot halt collection activities.

The Employee Retention Credit and Jurisdiction

The Employee Retention Credit presents a unique challenge in CDP cases. The Tax Court in Peoplease addressed this issue head-on, making two critical determinations about ERTC claims in the collection context.

First, the court emphasized that it lacks jurisdiction in CDP cases to determine overpayments or credits from other tax periods. This jurisdictional limitation means that even if a taxpayer has potentially valid ERTC claims for other quarters that might satisfy the liability under collection, these claims cannot prevent current collection action.

Second, and perhaps more importantly, the court held that unprocessed credit claims do not constitute “available credits” that can be considered in determining whether a tax liability remains unpaid. The taxpayer had argued that its submitted ERTC claims for other quarters would ultimately resolve the liability at issue. However, the court rejected this argument, holding that mere claims for credit – even substantial ones – cannot be used to challenge the appropriateness of collection actions. This aligns with the longstanding principle from Weber v. Commissioner that potential future credits or refunds cannot serve as a basis for halting current collections.

What this misses is that the IRS is, admittedly, not processing ERTC claims. It has a statutory obligation to do so, but has administratively decided not to fulfill its delegated government obligation to process these returns. So unfortunately, with the tax court holding, the answer is that the IRS apparently can simply refuse to follow the law that requires it to process tax returns, and at the same time pursue taxpayers for collections in other periods even when the net balance is actually owed to the taxpayer and not the IRS.

The Takeaway

This case explains that taxpayers cannot rely on unprocessed credit claims, even potentially substantial ones, to prevent IRS collection actions. This principle applies broadly to all types of credit claims, including the Employee Retention Tax Credit–but it is particularly problematic for ERTCs. This does not mean that the extension of time that the CDP hearing provides is not helpful. But for taxpayers facing collection while awaiting credit processing, pursuing immediate collection alternatives may provide a more achievable remedy given this case.

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