What Are AI Defects? — The Core of AI Yield

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In Manufacturing, There Is a Fundamental Question

In manufacturing, there is one fundamental question.

That question is:

What is a defective product?

In factories,

before producing anything,

the definition of defects

is determined.

Why?

Because without defining defects,

quality control is impossible.


AI Systems Still Lack This Question

Interestingly,

many AI systems

still do not have

this fundamental question.


AI Produces Decisions at Scale

AI systems

mass-produce decisions.

  • Fraud detection
  • Recommendations
  • Credit scoring
  • Ad delivery
  • Customer support

All of these systems generate:

  • Tens of thousands
  • Millions
  • Hundreds of millions

of decisions every day.

In other words,

AI is a factory of decisions.

And in every factory,

there is something that always exists.

That is:

defects.


What Are AI Defects?

Simply put,

AI defects are:

decisions that are not socially acceptable.

For example:

  • False blocks
  • Incorrect charges
  • Wrong bans
  • Misdiagnoses
  • Irrelevant recommendations

However,

AI defects are more complex than they appear.


Three Types of AI Defects

AI defects can be broadly classified into three categories.


1. Wrong Decisions

This is the most obvious type.

The AI produces

an incorrect decision.

For example:

  • Flagging legitimate users as fraudulent
  • Rejecting safe transactions
  • Providing incorrect answers

This is primarily

a model accuracy issue.

However,

most serious AI failures

do not occur here.


2. Illegal Decisions (Decisions That Should Not Be Made)

This is actually

the most dangerous type of defect.

The AI makes a decision

in a situation where it should not decide.

For example:

  • Insufficient data
  • Unknown patterns
  • Low confidence
  • Ethical considerations
  • High-impact outcomes

In such cases,

the AI should

stop.

However, without proper boundaries,

the AI continues

to make decisions.

This is

a design defect.


3. Untraceable Decisions

There is another critical type of defect:

decisions that cannot be explained.

For example:

  • Why was this customer rejected?
  • Why was this ad shown?
  • Why was this answer generated?

If there is no:

  • Log
  • Decision rationale
  • Decision rules

then the decision becomes

unauditable.

As a social system,

this is

a defective output.


Structure of AI Defects

AI defects can be summarized as follows:

Defect Type Cause
Wrong Decision Model
Illegal Decision Boundary
Untraceable Decision System Design

The key point is:

Most AI defects are not caused by the model.


The Essence of AI Yield

AI yield is defined as:

The proportion of decisions that are not defective.

In other words:

AI Yield = Total Decisions − Defective Decisions


How to Improve AI Yield

The important insight is:

Improving the model alone is not sufficient.

What truly matters is:

  • Boundary design
  • Decision design
  • Logging architecture

Lessons from Semiconductor Manufacturing

This is similar to semiconductor factories.

Semiconductor companies did not improve yield

by making chips perfect.

They improved yield through:

  • Inspection processes
  • Redundancy design
  • Failure analysis

AI will follow the same path.


The Essence of AI System Design

Building an AI system

is not about building a model.

Building an AI system

is about

designing defects.


In other words:

  • What is considered defective?
  • Where should the system stop?
  • How should decisions be recorded?

These must be designed.


The Structure of AI

AI produces signals.

Decision determines actions.
Boundary stops defects.

And as a result,

AI yield is determined.


The Future of AI

The future of AI

is not about model competition.

The future of AI

is about

quality engineering.

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