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What Is Artificial Intelligence (AI)? Here Are Its Benefits, Uses and More Are you interested in artificial intelligence and how it can impact your industry? Keep reading to learn about AI and what it means.

By Entrepreneur Staff

entrepreneur daily

Companies, commentators and even sci-fi movies can't stop talking about artificial intelligence (AI).

Indeed, AI in the real world is far from the artificial intelligence villains you might recall from your favorite sci-fi flick.

This article will break down what artificial intelligence is, how it works and how it's used in the real world. It will also explore AI technology's benefits and potential downsides now and in the near future.

Artificial intelligence explained

Artificial intelligence is the computer simulation of human intelligence. It's programming one or more machines to act in a way that mimics or replicates human behavior. AI breakthroughs are tied to computer science and programming languages, and applications of AI are scalable to simplify workflows across various industries.

Depending on the AI program or software used, it can more or less act similarly to someone doing the same task when viewed from the outside as an observer.

In general, AI is about creating software that is "smart" enough to do complex tasks without excessive human intervention or direction.

Indeed, AI researchers want to program computers to rationalize and think semi-independently. In this way, AI computers and software will likely be able to solve problems faster and better than humans can.

Artificial intelligence is closely connected to machine learning models, a technology that allows machines and computer programs to learn from and adapt the data without human assistance.

For example, a software program could be created (in theory) to run several tests, take the results from those tests, and come to conclusions or better processes without a human having to interfere or direct it.

Artificial intelligence is not about building anything you may have seen in science-fiction stories, like killer robots, war machines and similar constructions. Rather, it's usually about maximizing efficiency, productivity and profit. Most AI research and AI development focus on use cases in the financial, business, supply chain, cybersecurity and healthcare industries.

Related: 3 Ways Machine Learning Can Help Entrepreneurs

What does AI really mean?

For most people, AI means that computers are becoming more intelligent and capable without human direction.

It's all based on the idea that human intelligence can be defined and then mimicked so that software can reliably emulate it, even to the point where humans can't tell whether they are talking to a machine or a real person.

In some cases, this is already true. Many people get fooled by ordinary customer service chatbot messaging or similar intelligent systems, which have enough preprogrammed sentences and responses that they can feel relatively lifelike.

However, AI researchers and machine learning software programmers are focused more on making types of artificial intelligence that can do more profound, more complex work and emulate human intelligence more comprehensively.

In a certain sense, humanity has reached the pinnacle of simple machine technology and inventions. With machines that can do precise tasks and carry out complex commands (if programmed correctly), the next phase in machine development is creativity, initiative and complex "thought."

This doesn't mean that AI will replace humans in all aspects, nor will artificial intelligence spell the end of the human race. It does, however, mean that many new technological advancements could be in the future.

These AI system advancements include:

  • Neural networks that mimic the activity of the human brain.
  • Deep learning algorithms.
  • Natural language processing and speech recognition AI algorithms.
  • New ways to automate systems.
  • Decision-making capabilities.
  • Real-time computer vision overlays or screens.

Related: 5 Ways Artificial Intelligence Is Already Influencing Your Daily Life and You Don't Even Know It

Why is AI important?

In a practical sense, artificial intelligence is essential for various specific goals and objectives.

For example, artificial intelligence software may allow enterprises to understand the enormous quantities of data they collect on their target consumers and customers. In this way, businesses can make better decisions about their marketing campaigns, their products and much more.

Alternatively, artificial intelligence could be critical because AI-powered machines could do some tasks better than humans, especially when it comes to repetitive or detailed-oriented tasks.

For instance, a computer can read mountains of legal documents much more quickly and accurately than even the savviest legal mind, and it can come to some conclusions to provide to lawyers later on.

AI is important because:

  • It represents the ability to improve or innovate in industries without much innovation.
  • It may allow humans to exceed current productive capacities even further, meaning more significant profits and more efficient production for businesses and industries.

Related: What Is AI, Anyway? Know Your Stuff With This Go-To Guide

How does artificial intelligence work?

AI works, in essence, like this:

  • A programmer writes a software program using complex, comprehensive and clever language.
  • That software program includes the capability to "learn" from experience, usually by recording event outcomes and changing its behavior in response. This is essentially what machine learning is.
  • The software program then tailors its behavior according to its experience, its predictions for future events and what it needs to do.

AI programming uses separate cognition skills to facilitate this behavior. Learning processes allow the AI program to acquire data and make rules for using that data to do actions.

Artificial intelligence programs use reasoning processes to use suitable algorithms and reach specific objectives or outcomes. Self-correction processes are leveraged to rework or fine-tune algorithms and constantly strive for more accurate or desirable results.

Naturally, this software process is highly complex and resource intensive. Therefore, artificial intelligence technology is only possible in specific contexts and for certain organizations.

Generally, real AI (as far as it has been developed) is only available to large enterprises and institutions like the government. AI technology uses specially designed hardware, such as special chips, servers and processors, to facilitate its actions.

In theory, as technology and hardware get better, and people develop new ways to write software creatively, the capabilities of artificial intelligence will continue to grow and expand.

Artificial intelligence types

Technically, artificial intelligence can be classified into several different types. The two broadest types are:

  • Narrow or weak AI. Narrow AI is artificial intelligence designed to complete or accommodate very specific tasks. Some examples of limited artificial intelligence include weather app assistants, chatbots and other digital aids, as well as specialized software intended to analyze data and optimize business functions.
  • General or strong AI. General artificial intelligence is closer to the imagined version of AI in sci-fi flicks. It's not yet fully realized, but it's intended to be more versatile and flexible than its narrow counterpart. In theory, general AI can do anything necessary, not just one or two tasks very well.

However, artificial intelligence can also be categorized differently based upon intended function and specific capabilities. These types include:

  • Reactive AI uses algorithms to optimize objectives or outputs based on specified inputs from human users. Examples include chess-playing AIs.
  • Limited memory AI adapts to past experiences and updates itself based on new data or observations. Examples include autonomous vehicles (or the programs that drive them).
  • Theory of mind AI is supposedly fully adaptive and can learn from past experiences. It includes some of the most advanced chatbots that can pass the Turing Test (named after the inventor of the computer, Alan Turing), though they are not self-aware. The Turing Test classifies any machine capable of engaging in conversation with a human without being detected as a machine as demonstrating human intelligence.
  • Self-aware AI is theoretically conscious and aware of its existence, like humans. Self-aware AI has yet to be created.

How can artificial intelligence be used?

There are practically no limits to how you can use AI solutions as they are developed and implemented in organizations.

Nowadays, AI gets used in various industries, and not just as publicity machines like IBM's Deep Blue or Watson, which famously won a game of Jeopardy! as an artificial general intelligence.

Related: 5 Ways Artificial Intelligence Is Radically Transforming Creativity in Business


In the healthcare industry, artificial intelligence is used to assist with healthcare diagnostics, such as identifying diseases or ailments in patients. That's because AI can often rival humans at locating and identifying anomalies or issues in diagnostic scans.

In the healthcare industry, AI is also helpfully utilized to track and maintain patient records, handle health insurance claims and even classify hospital patients quickly and efficiently.

Driving and machine operation

Autonomous vehicles like those from Tesla also heavily use modern artificial intelligence programs.

With self-driving cars, AI may eventually learn from other drivers, fine-tune its own safety practices and drive more safely than even the most experienced human, all while maintaining faster response times due to its computerized nature.

In addition, the manufacturing and industrial sectors often use limited machine learning or AI software to operate machines requiring incredible precision and repetition.

Related: What's Under the 'Hood' of Self-Driving Cars?

Financial applications

The financial industry can use artificial intelligence to analyze stocks, market trends and other economic activity, thus allowing brokers and fund managers to make better decisions on behalf of their clients. This is similar to algorithmic trading and has been increasingly common in recent years.

AI is good at this because it can take a lot of information, analyze it quickly and come to accurate conclusions based on past data sets. AI uses expert systems to improve pricing and similar actions over time.


You can use artificial intelligence programs to make gaming bots or nonplayer characters, also known as NPCs. AI intelligence is getting better in this arena all the time — modern bots can simulate some of the motions or behaviors of human players very realistically by simulating the human mind.

Related: 3 Surprising Ways That Video Game Companies Leverage AI

User assistance

Naturally, artificial intelligence programs are already being used for general user assistance purposes, such as Amazon Alexa. Siri, Cortana, and other basic AI programs will likely become even more sophisticated and intelligent as time goes on.

Virtual assistants are already among the most commonly used types of AI computer systems and maybe eventually replace personal assistants.

Data analysis

You can use artificial intelligence for general data analysis across various industries. Many large organizations already leverage machine learning or AI platforms and programs to understand their data sets. Google famously uses artificial intelligence to understand its billions of users' queries and search patterns.

The benefits of AI

Many people are excited for artificial intelligence technology to grow even further, primarily because of its potential advantages.

For example, artificial intelligence programs tend to be much better at detail-oriented jobs than humans, as there is less of a chance that these programs would miss details due to fatigue or human error. This can significantly reduce the time needed for data-heavy tasks, and artificial intelligence programs are already better at analyzing big chunks of data than humans.

In addition, AI can deliver more consistent results with fewer errors than human counterparts. Machines like AI don't break or make mathematical errors as often as humans, plain and simple.

Some businesses are also looking into AI to replace specific jobs because AI-powered chatbots, virtual agents and customer service agents are always available 24/7, allowing them to respond to customer complaints quickly and easily, around the clock.

In a broad sense, AI will allow businesses to make more money, save more and deliver better customer results. The same is true for hospitals, governments and other large organizations that have a lot to do and rely on taking advantage of big data sets.

Related: AI Gives Outdated Industries a Makeover

The downsides of AI

That all said, AI does have some downsides that it needs to overcome.

For starters, artificial intelligence is universally expensive. This is why only some organizations, like the U.S. government, Google and other big enterprises, can fully take advantage of its technology and benefits.

In addition, AI usually requires deep technical expertise to leverage it effectively. This requires having the staff on hand to use, edit and repair AI software or technology from time to time, which only adds to its operating expenses.

Furthermore, since AI is still relatively unproven and still being developed, only a limited number of workers have the qualifications to build AI tools or monitor AI programs.

Since artificial intelligence hasn't reached its full potential, it can't maintain or repair itself, meaning it is liable to have issues or "break down" in specific contexts.

Given all these flaws, it's no surprise why artificial intelligence hasn't yet taken over many industries and sectors, despite its purported importance and power.


Artificial intelligence isn't a computerized bogeyman out to ruin the world. AI is also not a one-size-fits-all solution for the world's problems. Rather, artificial intelligence is a valuable software tool that businesses and individuals can leverage for their goals.

In the future, artificial intelligence may evolve in a somewhat unpredictable direction, offering even more benefits to organizations that take advantage of it.

Entrepreneur Staff

Entrepreneur Staff


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