>But the second issue hits right at the heart of a major societal problem/debate. When we use AI to make decisions about people, will the system become racist--- even with representative datasets?

Yeah this is tough, answering the question of the odds a person may default on a loan will probably reflect historical bias. In fact I'd argue that it should show this if the model is accurate.

The moral issue is what do you do with that information? Do you use that knowledge to improve the outcomes of the disenfranchised or do you reinforce the bias based on the information you have?