AI 101

HOW LEARNING COMPUTERS ARE BECOMING

SMARTER

February 2018

The BI Intelligence Research Team

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WHAT IS ARTIFICIAL
INTELLIGENCE?
You’ve likely heard the term artificial intelligence (or its abbreviation AI) thrown
about by tech companies or the media. Many companies use the term as a way to
generate excitement for their products and to present themselves as on the cutting
edge of tech development.

But what exactly is artificial intelligence? What does it involve? And how will it help
the development of future generations?

Put simply, artificial intelligence techniques teach computers to parse data in a

contextual manner to provide requested information, supply analysis, or trigger an
event based on their findings.

A common example of AI in today’s world is chatbots, specifically the “live chat”

versions that handle basic customer service complaints on companies’ websites.

An indicator of just how human-like these machines can be was actually developed
in the 1950s by British scientist Alan Turing. His Turing Test checks the presence of
mind, thought, or intelligence in a machine and if it can fool a human to believe that
it is a human as well, then it passes the test.

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HOW DOES AI WORK?
Once an AI is created, its development has only just begun. As with human brains,
an AI can learn and adapt over time to improve its performance. And this learning
process occurs in much the same way it does for humans. The AI absorbs and
stores information and data, then processes it to better inform its future decisions
and interactions.

But in fact, we can think of AI as the outermost layer of a much more complex
learning process that contains four main layers, according to Intel. Beneath AI is
machine learning, a process that allows machines to learn and act without the need
for human input or instruction to perform specific tasks.

The third level is deep learning, wherein an AI is able to process vast amounts of
data to facilitate processes such as image, speech, and language recognition.

The fourth and final level is the neural network, which has the power to push AI to
unseen heights. The human brain has more than 100 billion neurons that handle
numerous complex processes within the body. The most complex neural network to
date has more than one billion nodes, so AI creators still have a long way to go to
fully mimic human brain patterns.

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AI APPLICATIONS
As mentioned earlier, AI largely interacts with the public today through customer
service chatbots. And voice assistants such as Amazon’s Alexa and Apple’s Siri can
answer some basic questions, handle scheduling and other administrative functions,
and even control other smart devices in the home.

Given the current state of AI development, it’s difficult for many industries to make
full use of artificial intelligence at this time. But AI has several future applications
that businesses could leverage in the coming years.

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Retail

AI allows websites to recommend products uniquely suited to shoppers, and

enables people to search for products using conversational language, or just
images, as though they were interacting with a person.

Retailers are starting to adopt more AI, as 54% of retailers in an SLI Systems study
said they either already use it or plan to use it at some point. Moreover, 18% of
respondents said they use it to personalize product recommendations. And this
adoption could be crucial, as applications of AI in the wholesale and retail
industries are estimated to raise profitability rates 59% by 2035, according to
Accenture.

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Transportation

AI can also help change transportation. The unique abilities of AI systems to identify
patterns in massive data sets and quickly deliver insights based on new information
make them more effective for certain functions in supply chain and logistics than
more traditional forecasting and analytics tools.

Consider Tesla, which has created cars with self-driving features and predictive
capabilities. If these features ever reach mass adoption, then they could help make
the roads safer for all drivers, passengers, and pedestrians.

To learn more about AI in transportation, read The AI in Supply Chain and

Logistics report from Business Insider Intelligence.

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Payments and Finance

Banks are beginning to use AI on the front end to secure customer identities, mimic
live employees, deepen digital interactions. While most of those use cases are in
the extremely early stages, securing digital identity stands out as a mature use case
of AI in banking, because of its strong support among banks and the cost savings it
drives.

AI is also being implemented by banks within back-office functions in three key

areas — aiding customer service employees, automating processes, and
preempting problems. Of these three, the most advanced is its application of aiding
customer service employees. AI is making headway when it comes to automating
existing processes, but there is still some way to go before AI can reliably be used
to preempt problems.

Lastly, in payments, AI is being used in fraud prevention and detection, anti-money

laundering (AML, and in growing conversational payments volume. Of those use
cases, preventing and detecting payments fraud is the most mature.

To learn more about AI in finance, read The AI in Banking report from Business
Insider Intelligence.

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THE FUTURE OF AI
The above applications are within reach, but some researchers and others in the
tech industry have more ambitious ideas for where the future of AI is headed.

Shimon Whiteson, a professor of computer science at the University of Oxford,

thinks AI could eventually turn us all into cyborgs in the ultimate marriage of human
and machine.

Thomas Dietterich, the Director of Intelligent Systems Research at Oregon State

University, believes that AI will help turn us into superhumans by, for example,
allowing elderly and disabled people to walk.

Stuart Russell, a computer scientist at the University of California Berkeley, says AI

will be able to solve massive problems, such as climate change.

And Sabine Hauert, a roboticist at the University of Bristol, believes AI will help
humanity explore new planets.

But it remains to be seen if AI will remain limited to retail and other grounded
applications, or if it can truly be a transformative technology that affects the fabric of
life as we know it.

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