Sandra Matz on How AI Reads Our Minds, and What It Gets Wrong

Open on YouTube ↗
Overview

Can AI understand a person better than their spouse or family can? And if so, should that be a source of fear or of help? In this one-on-one interview on TBS CROSS DIG with Bloomberg, host Ryuichiro Takeshita talks with Sandra Matz, a professor at Columbia Business School whose book Mindmasters has just been published in Japanese. The Japanese edition was translated by the NTT Data team and includes additional chapters. Matz said those chapters were meant to add local relevance and practical recommendations for Japanese readers.

24 min read

Matz's position runs through the whole conversation. AI already infers intimate things about people with striking accuracy, mostly from the "breadcrumbs" of data they leave behind. That ability can be used to exploit people or to support them. She argues that the right response is to understand and engage with the technology, not to reject it, while staying clear about where it falls short. In her view, those weak spots are non-verbal cues, cultural nuance, and the unusual "edges" of a person.

1:31

Two Kinds of MBA Students

Takeshita opened by asking how Matz's business school students use AI. Her answer was that they all use it, and that both students and faculty are still working out how to use it well. She sees the students splitting into two camps.

The first camp hands its critical thinking to AI. Matz said she is always surprised that these students think she won't notice, because the signs are obvious. When students give a chatbot the same prompt, it returns essentially the same essay. Each one may read well alone, but when she reads 20 of them, they say the same things in nearly the same words. The difference also shows in class. MBA courses depend on discussion and debate, and students who outsourced their thinking cannot keep up. When she probes a little deeper, she says, "they're out pretty quickly."

The second camp uses AI to make learning harder on themselves. These students treat it like a professor who questions them, finds holes in their arguments, and tests whether they would lose a debate against an opponent. Matz said most students currently belong to the outsourcing group. The students who actually work with AI, however, are the ones getting jobs.

Takeshita asked whether students fear that AI will make MBAs and business schools unnecessary. Matz said they are afraid, and she called that fear "not completely rational." She agreed it has become harder for MBAs to find jobs. Even so, she sees the same split here. Students who use AI to build subject-matter expertise, getting better at their work faster and in more depth, gain a large advantage. According to Matz, those students have multiple job offers, and better ones than graduates used to get.

3:54

A Toddler, Attention, and the Problem of Endless Praise

The conversation then moved to children and mental health. Takeshita noted that parents are worried, that some countries are banning social media for children, and that AI might be restricted next. Matz, the mother of a two-and-a-half-year-old, said she thinks about this personally. If she hands her son a phone for two seconds, he somehow already knows how to use it, and he gets upset when she takes it back. She described phones as "attention suckers" that deliver the next dopamine hit. Social media intensifies this, she said, because it adds social reward: the user gets positive feedback from other people, not just a video to watch.

She sees social media and AI as similar in some ways. Both can connect people, and both give an immediate sense that someone is listening. But she said she is "much more concerned" about the current generation of AI chatbots. They are trained, for understandable reasons, to be kind and constructive. Every question is brilliant, and the user is funny and smart. Even when a chatbot disagrees, it does so as gently as possible.

Her worry is that children who rely heavily on this will lose the ability to handle messy human interactions. Adults had to go through the friction of spouses and friends who disagree with them. That friction is painful and not always fun, but Matz called it "fundamentally human" and said it is how people grow and build meaningful relationships. If children never learn to handle it, she fears they will turn to AI every time. A friend might push back, get emotional, cry, or walk out, while an AI never will. She compared this to crack: great in the moment, probably not good in the long run. She said a body of research suggests this is already happening. Over time, people devalue their relationships with other humans and become more aggressive and more sexist, because their expectations have become unrealistic.

6:56

The Village That Knew Everything

Takeshita brought up an example from the opening of Mindmasters. Matz grew up in a German village of about 500 people, where everyone knew who had an accident and who was dating whom. Takeshita said his wife also grew up in a small village. She sometimes hated that environment, but people also knew her and were there to help when problems came up. It was a double-edged sword.

Matz agreed. Since moving to New York, she said, she has never experienced anything like it; there, people barely know your name. In the village, people who cared about her offered advice about relationships and about what to do after school. That was a remarkable support system, but also annoying. Villagers did not just want to know who she was dating. They tried to influence it, "pulling the strings" behind the scenes instead of openly giving advice. When Takeshita said this sounds like an algorithm, she agreed.

Algorithms now see almost everything people do, she explained, because every step leaves a trace: search history, a phone carried around the clock. She noted that people ask Google questions they would not ask friends or even partners, and that their conversations with ChatGPT can be "incredibly intimate." The result is that an entity people have no relationship with understands a great deal about their lives. Her example: she does not know OpenAI personally, yet it may understand everything about her life, and it could use that knowledge to exploit her.

9:13

AI as a Smoke Detector for Mental Health

Matz said mental health shows both sides of this most clearly. If a system can tell that someone is struggling, it can exploit them by selling things they do not need or pushing them further into despair. The same signal is also an opportunity. A phone might show through GPS that a person leaves home much less than before, or that they are interacting less with friends. That could mean nothing; the person might be on vacation reading a book. It could also be an early sign of emotional distress.

She compares such signals to a smoke detector. It is not a diagnostic tool like a visit to a psychiatrist, but it can indicate that something is off. If the signal is caught early and the person is pointed toward support, she said, they might be helped "before it becomes too late."

Takeshita said this matched what he had heard from parents whose children had mental health problems. They often said they wished they had known sooner. Matz added that seeing "smoke" does not mean confronting a child; it can be a reason to reconnect. She said the same applies to adults. Depression, for example, is likely to recur once someone has a history of it, and it is usually caught too late. She suggested that a person with such a history could nominate trusted people as "stewards" of their smoke alarm, such as parents, a spouse, or close friends. When the alarm goes off, it alerts them too, so the person does not have to dig their way out alone.

Takeshita said "engagement" is a key theme of the conversation. He admitted he is also afraid of AI, but since it is now the default situation, he feels people need to engage with it and bring human ethics into it. Matz agreed. Engaging builds an understanding of the limitations. Once people know that AI tends to be extremely nice, even sycophantic, they can deal with that and learn what AI is good and bad at. That literacy is being built gradually, she said, and it is "really hard."

11:59

How Much Can AI Know About Us?

Takeshita asked Matz to put a number, from 1 to 100, on how much of a person AI can understand. She said numbers are hard, but that AI is "really good," and was even before today's flexible models. Earlier machine learning systems were given a narrow problem and data with known answers. Even then, for traits that are easy to quantify and that people consider fairly private, such as sexual orientation, political ideology, and gender, accuracy was "in the high 90s." For a categorical judgment like liberal versus conservative, given all of a person's data, the prediction can be very accurate.

As a psychologist, Matz finds the more fluid traits more interesting: personality, values, and mental health, which are not a one or a zero. Numbers mean less there. What researchers can do instead is compare AI's judgments with those of people who should know someone well. When they do, Matz said, AI outperforms essentially everyone: co-workers, friends, and family members, including parents, children, and siblings. Her explanation goes back to Google and ChatGPT. Because technology feels somewhat anonymous, people reveal parts of themselves to it that they do not reveal to the people around them.

14:12

Language, Non-Verbal Cues, and Breadcrumbs

Takeshita pushed back. AI in 2026 learns mainly from text, he said, but he communicates with his wife through body language and time spent together, not only through messages. Why would something that learns from text do better?

Matz agreed that AI is still not good at reading non-verbal cues, and those cues matter a great deal in the moment. If she wants to know whether he is angry right now, reading his body language is very useful. Understanding someone's general tendencies or disposition is different: that requires sampling as widely as possible across many situations. This is where AI is strong, and not only with text. Text is how people interface with it, but it can also process search histories, GPS records, and other data in any format, then fit the puzzle pieces together. It sees what people intentionally communicate and everything else as well. Her example: if someone's phone keeps running out of battery, perhaps they are less organized than others. Takeshita said his phone does the same. People nearby rarely see these traces, she noted, though they have the advantage in a live conversation, where they can read the non-verbal cues.

Takeshita then asked whether these breadcrumbs can really tell the whole story of a person. Matz said it is never the full story. Media coverage often presents this as a "wonder weapon" that pinpoints exactly who someone is, but every prediction contains errors. Much of the data is noise. Someone might buy a gift for another person, or go somewhere for work rather than by choice. The power lies in combining all the breadcrumbs.

Takeshita raised Instagram posts made to show off. Matz said researchers call these "identity claims": statements of who people are and how they want to be seen. In her account, people tend to exaggerate in the same direction. Everyone wants to appear a little less neurotic and a little more extroverted, so the result is a "parallel shift." For that reason, it is not a big problem for AI. A true introvert is unlikely to appear more extroverted online than a real extrovert, because the extrovert is exaggerating too. The ranking between them survives. On top of that, AI has all the breadcrumbs people do not think about, such as a phone running low on battery or three trips to the grocery store in one day.

18:01

The Big Five: Where It Came From and What It Measures

Takeshita said one appeal of the book is that it combines traditional psychology with current science, and he asked Matz to explain the Big Five. She described it as a framework from psychology designed to explain and predict behavior across many situations. It was developed through language. Two psychologists went through the English dictionary and extracted adjectives, on the assumption that anything meaningful about how people behave and experience the world would be expressed in language. They then looked at how adjectives such as kind, generous, assertive, and determined cluster together. Does someone who calls themselves decisive also call themselves assertive? Does someone social also describe themselves as chatty? From these clusters came five dimensions that explain most differences in how people think, feel, and behave.

According to Matz, the Big Five is unusual because it holds up across cultures, languages, and contexts. It also helps explain things such as music preferences, vocational interests, and mental health. She stressed that each dimension is continuous, not a high-or-low category:

  • Openness: curiosity about the world, intellectual engagement, and a strong interest in aesthetics and design, which she said is big in Japan. At the other end are people who are more conservative, down-to-earth, and conventional.
  • Conscientiousness: sometimes called "the German trait." It ranges from organized, dependable, and reliable to, as she put it kindly, more flexible, or disorganized.
  • Extraversion: sociability, enjoyment of other people's company, seeking stimulation, and optimism. More introverted people are content in their own company and do not need constant stimulation.
  • Agreeableness: the interpersonal trait. Caring, trusting, and empathetic at one end; more competitive and critical at the other.
  • Neuroticism: emotional life, from easily stressed and anxious to relaxed and calm.
21:23

Takeshita's Test Results

Takeshita had taken the personality test that morning and showed Matz his results. She said people who work in media are usually high on openness, because they are curious about the wider world rather than staying in front of the TV. His conscientiousness score was 2%, which Matz described as "a little bit more flexible." She said she uses the same phrase for herself. She called herself "the one German who didn't get high conscientiousness" and joked that maybe that is why she left for the US.

She used the result to make a broader point. People tend to assume high conscientiousness and low neuroticism are simply good, but every trait has an upside. People who are very conscientious often miss the bigger picture and struggle to adapt. Entrepreneurs, she said, benefit from some order in their spreadsheets but not if it stops them adjusting to new ideas. Takeshita's extraversion was high, which she said is unsurprising for a media personality. His agreeableness was also high, including trust and respectfulness, which she said matches her experience of Japan more generally. His negative emotionality, the neuroticism dimension, was somewhere in the middle. Takeshita told viewers they could take the same test on the book's official website.

23:12

Does AI Make the Big Five Unnecessary?

Takeshita asked whether AI can do better than such a test. Matz said the framework is useful because it allows comparisons across contexts. If you know nothing about a stranger, their Big Five profile gives you a rough idea of who they are. Once you know someone well, you tend to drop it. Nobody thinks about their spouse in Big Five terms, because they know the spouse in a more nuanced and complex way. She called the Big Five "a very pragmatic solution," not the most in-depth one. It is a generalization: people can be extroverted or open in many different ways, and that complexity is lost. AI, she said, is good at preserving it.

She explained why the Big Five stayed so useful before the latest models: there was always a human in the loop. In marketing, if the goal is only to predict which product a customer buys next, a model can use millions of dimensions, and reducing them to five would just add noise. But if a person has to decide how to speak to the customer or what motivates them, the Big Five helps, because humans cannot make sense of a matrix with a billion data points. Five is a manageable number. Takeshita mentioned the "seven plus or minus two" rule, and Matz agreed it roughly matches what the brain can handle.

Now that AI also generates communication and content, Matz said, the framework is often unnecessary. You can give AI everything known about a person and ask it to write the most persuasive ad for that specific person, and it can do that "pretty well." It needs a human-readable framework only when it has to communicate with a human. For example, if it wants to brief a shop assistant on how to talk to a customer consistently with the ad it produced, it has to translate its knowledge into something a person can understand.

Takeshita suggested that customers might eventually have their own AI agents, so that AI talks to AI without a human in the loop. Matz called that "a terrifying thought." She described this kind of AI as "your spouse on steroids": able to do much more than a spouse in some ways and much less in others, and familiar enough with a person that it needs a framework only to explain something.

26:14

Where AI Falls Short: The Average and the Edges

Asked where AI's knowledge is lacking, Matz said it "overindexes on the average." AI is trained to predict the most likely next element in a sequence, which by definition is the most common one. When it tries to understand a person, it drifts toward the average. In studies using "synthetic humans" to test how customers might react to a product mock-up, she said, AI gives a good sense of the average response, such as which of two options people prefer overall. What it does not capture well is the distribution. It loses the edges: the odd things about a person, or the moments when someone acts out of character.

This is where a spouse still does better, in her view. A spouse knows that a partner is generally calm but will "freak out" in one particular situation. Humans, she said, see much more of this complexity than AI can preserve, given how AI works.

27:41

Bowing, Culture, and Western Training Data

Takeshita said AI seems to assume that people express everything in language, while in Japan much communication is non-verbal, such as nuanced bowing. Is AI too dependent on language?

Matz expects this to change. She does not think the future will consist of typing questions into a chatbot; interaction will become more fluid. As computer vision and the models improve, she thinks AI will eventually pick up on such signals. But Takeshita had pointed to a deeper problem: even then, everything depends on the training data. If that data is mostly Western, showing how extraversion or politeness is expressed in a Western context, AI will default to those patterns unless cultural sensitivity is built into the model. She said many companies are trying to do this, but it is "not trivial." Cultural nuances often sit at the edges, and if AI is weak at the edges, they will be lost.

Takeshita returned to the theme of engagement. He suggested that Japanese companies, citizens, writers, and journalists could put more content online and help make AI more diverse. Matz said this is hard for individuals. It is unclear at what stage of training cultural sensitivity can be added, and if there is little data about certain minorities, it is not obvious how to build them into the model. People inside the AI companies also need to be thinking about these questions, and she said the companies are "still catching up a little bit."

29:47

Studying the Psychology of Models

On the future of AI and psychology, Matz said that as a scientist she finds it fascinating in both directions. AI can be used to learn about the human mind, and models can be studied as having psychologies of their own. They are not all the same. When Takeshita said ChatGPT and Grok feel different, she agreed they have "completely different personalities." She said there is a scientific push to look beyond outputs to the architecture: how activation patterns differ inside each model. That kind of inspection is very hard to do with the human brain, outside some patient cases. So she raised the possibility that we might come to understand the models better and learn about the human mind along the way.

She described the risks as widely discussed. One is "cognitive surrender," for which her MBA students are a prime example: people lose skills such as critical thinking. Another is the loss of the ability to handle offline relationships, which she said she is especially interested in. Most of her own research, however, is on the opportunity side. If AI makes people boring by pulling them toward the average, she asks how systems could be designed to do the opposite and enhance people's complexity. She expects the downsides to dominate public discussion over the next few years. Her hope is that scientists can identify uses that reduce these risks or support human flourishing.

31:57

Why Grok and ChatGPT Differ: Training Data

Takeshita asked why models behave differently: the training data, how they absorb it, or the length of training? Matz said "everything," and gave Grok as an example. She said it was trained essentially on Twitter. When she asked whether Twitter content was more sexist, Takeshita said he did not want to comment but understood her point. She said this shows directly how training data shapes a model.

In business settings, she noted, there is debate about whether models need to be so large. Smaller models trained on focused, high-quality datasets might work better than models trained on the whole internet, including Twitter and Reddit. She said this makes human-produced content valuable, citing her understanding that The New York Times now earns a lot by licensing its content. The data also shapes what she called the "personality" of a model.

Takeshita asked whether a model trained only on high-quality material, such as her book, paintings, or plays, would be better. Matz said it depends on the goal. If the aim is to capture human experience broadly, then Twitter and Reddit are useful, because they include the dark sides of human nature, which the model can then reproduce. If the model serves a specific business purpose, excluding data that would never be used in that context might improve it. For someone writing journalistic articles, she said, focusing on high-quality content rather than Twitter may make sense.

34:17

Will AI Produce a New Theory of Psychology?

Takeshita asked whether research on how models work will change psychology itself. Matz said she hopes so, but the work is technical and difficult, and "we're not doing a great job" yet. She described the field of mechanistic interpretability, which aims to open models and understand causally how they make decisions. Models hallucinate, she said, because they are probabilistic: they choose the most likely next element, and the result is not always the same. Once the causal chain behind a model's decisions is fully understood, she thinks we will be much closer to understanding psychology.

She added a twist. People do not fully understand the human mind either. When a person explains their own decision, the explanation may not be the real reason; she said neuroscience shows people often make up a story after the fact. So we may end up understanding models better than human minds, and the interesting work may be explaining the gap: cases where an explanation fits a model but not a human.

Asked whether AI will produce a breakthrough theory of psychology, Matz said she was "not entirely sure." She expects a great deal of strong AI-driven research in the natural sciences, where the task is understanding building blocks. Psychology, she said, is centered on subjective experience. AI might raise interesting questions or show how theories connect, but she finds it hard to imagine it producing a completely new theory no one has thought of. She thinks it may help explain how physiology relates to experience, how neuroscience works, and how consciousness works. Her conclusion: likely yes for the natural sciences, and for pure psychology, an open question.