Emerging technologies are paving the way for a new era of innovation

The world is witnessing a technological renaissance, fueled by rapid advancements in artificial intelligence (AI). The quickly evolving sub-disciplines of AI, namely Analytical AI, Generative AI, and Hyperautomation, are converging to create a powerful force of innovation. These technologies, especially when correctly combined, create powerful synergies and are reshaping industries across the board.

Analytical AI: The power of insights

With its focus on extracting insights from vast datasets through advanced algorithms, statistical models, and machine learning techniques, Analytical AI provides foundational capabilities for understanding data in its various forms. It allows us to identify patterns, predict outcomes, and make data-driven decisions.

Generative AI: Reimagined Creativity

As a subset of machine learning consisting of deep learning models, Generative AI can create new, high-quality content based on what it has learned from its training data. It pushes the boundaries of what’s possible by creating new content and experiences—from crafting compelling narratives to generating realistic images and even composing music. Generative AI is transforming fields like art, entertainment, software, and even scientific research.

Hyperautomation: The next wave of efficiency

By expanding the depth and breadth of the traditional, narrowly-focused automation, Hyperautomation helps organizations systematically identify and automate business and IT processes. It relies on orchestration (and intelligent automation) of multiple technologies and tools. The goal with Hyperautomation is to maximize operational efficiency, agility, and ultimately, achieve significant business outcomes. Hyperautomation is becoming increasingly sophisticated, capable of handling complex decision-making and even adapting to changing circumstances.

The infographic below highlights the key differences between Analytical AI, Generative AI, and Hyperautomation, including focus, purpose, and best practices for each.

The true power lies in the convergence of these technologies. When correctly implemented, these three AI paradigms can transform enterprises, large and small. As these technologies continue to evolve, we can expect to see increased automation of knowledge work, personalized experiences at scale, and unprecedented levels of efficiency and productivity across various sectors.

However, this rapid advancement also necessitates a responsible approach. Careful consideration must be given to ethical implications, data privacy, and the potential impact on the workforce to ensure that these technologies benefit businesses while protecting society as a whole.

To learn more, begin your enterprise AI journey here and be sure to read our previous articles on key AI terms and how to build a winning AI strategy with the 5 Vs of data.

ABOUT ENTEFY

Entefy is an enterprise AI software and hyperautomation company. Entefy’s patented, multisensory AI technology delivers on the promise of the intelligent enterprise, at unprecedented speed and scale.

Entefy products and services help organizations transform their legacy systems and business processes—everything from knowledge management to workflows, supply chain logistics, cybersecurity, data privacy, customer engagement, quality assurance, forecasting, and more. Entefy’s customers vary in size from SMEs to large global public companies across multiple industries including financial services, healthcare, retail, and manufacturing.

To leap ahead and future proof your business with Entefy’s breakthrough AI technologies, visit www.entefy.com or contact us at contact@entefy.com.

The future of finance is a human-AI partnership

Artificial Intelligence (AI) has become a cornerstone of innovation across various industries, including financial services. AI is expected to change the future of money and finance with its ability to generate predictive insight, enhance risk management, enable true personalization, reduce bias in lending, power hyperautomation, and drive efficiency in markets. AI’s influence also extends to blockchain technology and decentralized finance (DeFi), optimizing cryptocurrency trading, improving security, and enabling smart contracts. Its ability to process vast amounts of data and learn from patterns is transforming how financial markets function, leading to more accurate predictions and faster, data-driven decision-making.

While AI solutions in trading, risk management, fraud detection, customer service, and knowledge management are experiencing rapid adoption in the financial sector, other applications in AI such as those used in wealth management and lending are being adopted at a slower pace.

Rapid Adoption of AI Applications within the Financial Sector

AI’s rapid integration into the financial sector is driven by its potential to optimize operations, reduce costs, minimize human errors, and enhance scalability. According to McKinsey, generative AI alone is estimated to add “between $2.6 trillion to $4.4 trillion annually” to the economy and could deliver an additional $200 billion to $340 billion if fully implemented in the banking industry.

The financial sector, known for its data-intensive operations, is adopting AI in several key areas, including:

Trading

AI has significantly impacted trading through enhanced analysis of historical data, market conditions, and economic indicators, all of which aid traders in making more informed decisions. Predictive models developed through machine learning can forecast future market trends and price movements. AI allows traders to crunch data like they never have, allowing them to adapt to real-time data and adjust their strategies based on market changes. Traders also use AI to better understand market sentiment. Specific machine learning models can analyze news articles and social media posts to gauge market sentiment to inform trading strategies. Algorithmic trading strategies leverage predefined rules and quantitative analysis techniques, such as regression analysis, to automatically execute trades based on market data and identified patterns. High-frequency trading and arbitrage strategies are common approaches within algorithmic trading, allowing traders to capitalize on market inefficiencies and small price movements at high speeds.

Implementations in AI have also led to the creation of trading robots and robo-advisors. These digital technologies provide automated, algorithm-driven financial planning and investment advisory services with little to no human supervision. Clients can activate their automated trading robots by answering a few questions pertaining to their current finances, financial goals, and risk tolerance. Those answers are then used to construct a portfolio made primarily of a suite of low-fee exchange-traded funds (ETFs). The technology also allows customers to plan and set up taxable brokerage accounts or tax-advantaged individual retirement accounts (IRAs). Through the power of AI and machine learning, the platforms automatically rebalance portfolios and maximize tax-loss harvesting.

Risk Management

In risk management, AI systems help companies better understand risks and how to mitigate them. These systems can evaluate structured and unstructured data as well as patterns in such data to build risk assessment models. These models use historical data to evaluate the likelihood of various outcomes and help risk managers make informed decisions, knowing the potential risks and opportunities, and developing strategies for managing them. AI can also help with stress testing, subjecting strategies to various market scenarios to see how they may perform under different conditions. By summarizing customer information, AI can accelerate lenders’ end-to-end credit process. Financial institutions are using generative AI to create credit risk reports and extract customer insights from credit memos. With machine intelligence, financial institutions can analyze credit data, gain visibility into customers’ risk profiles, and generate default and loss probability estimates through models. Utilizing these risk assessment models allows companies to be better prepared for unexpected market conditions and improve their chances of success. With AI continually learning and adapting to new risk factors, the technology is poised to stay up to date with emerging threats, offering unprecedented protection for financial institutions and their customers.

Fraud Detection

AI’s ability to detect fraud patterns is reaching new heights. Today, advanced models analyze underlying behaviors and characteristics associated with fraud, identifying abnormal patterns, such as unusually high transaction amounts, and frequent purchases in unusual locations or strange time intervals between transactions. Behavioral analytics are also being employed to immediately detect fraudulent purchases. The U.S. Department of Treasury announced the recovery of more than “$375 million as a result of its implementation of an enhanced fraud detection process” powered by AI technology. Mastercard’s AI-based fraud detection platform, “Decision Intelligence,” reviews customer spending patterns and determines the likelihood of fraud for each transaction as it occurs. This has already helped them “score and safely approve 143 billion transactions a year.” Their next generation technology, “Decision Intelligence Pro,” enhances decision intelligence scores in under 50 milliseconds. According to Mastercard’s initial modeling, the adoption of AI technology has led to an average increase in fraud detection rates by 20%, with improvements reaching up to 300% in certain cases. The rapid adoption of AI and machine learning in fraud detection has allowed financial service companies the opportunity to revolutionize their ability to protect their customers from fraudulent transactions and other scams.

Customer Service

AI-powered chatbots are designed to provide 24/7/365 customer service, streamlining customer interactions and reducing costs. As of 2023, all of the top 10 largest commercial banks had integrated chatbots into their customer service operations. Institutions such as Capital One have built their own chatbot technologies with models trained on data from real customer conversations and chat logs. Bank of America introduced its chatbot, Erica, in 2018, and by October 2022, it had engaged with almost 32 million customers across more than 1 billion interactions. In 2022, roughly 37% of the U.S. population (more than 98 million people) interacted with a bank’s chatbot and, by 2026, this figure is expected to expand to 111 million. AI chatbot’s 24/7 availability is a powerful advantage in the world of finance. Studies indicate that for financial institutions, chatbots, when used instead of human customer service agents, “deliver $8 billion per annum in cost savings, approximately $0.70 saved per customer interaction.” Over time, AI powered tools are expected to further improve customer service, pave the way for more personalized financial advice, streamline operations, and reduce costs.

Knowledge Management

One of the most important assets within an enterprise is their knowledge base. This knowledge base is a treasure trove of information but can be notoriously difficult to manage. AI can dramatically improve document and knowledge management across organizations. As employees leave a company, preserving institutional knowledge becomes crucial. AI systems like JP Morgan Chase’s DocLLM categorize financial documents, ensuring that the valuable insights and processes are not lost and instead passed on seamlessly to new generations. This continuity is essential for maintaining organizational memory and fostering ongoing success.

Nearly half of digital workers depend on information to do their job properly and, according to a Gartner survey, “47% of digital workers struggle to find the information needed to effectively perform their jobs.” By utilizing natural language processing (NLP) and other machine learning techniques, companies are now providing their employees with a more precise and efficient knowledge management solution. These advanced technologies enable cost-effective processing and categorization of vast amounts of data, providing users a better way to find information and complete tasks.  

AI Applications that are experiencing slower adoption

Despite the rapid advancements in certain areas of finance, AI adoption in wealth management and lending is lagging. These areas face unique challenges that slow down the widespread implementation of AI technologies.

The slower adoption of these AI applications is due to several factors including fast-evolving governmental regulations that require financial institutions to understand and explain each of their decisions, thereby complicating AI implementation. Further, concerns about deep fakes, data quality, and misinformation introduce new hurdles for AI integration. AI models trained on inaccurate data can produce incorrect outputs, leading to an erosion of trust. In addition, many organizations struggle with managing data privacy and security, particularly when deploying AI systems in real-world use cases.

Wealth Management

Traditionally a domain heavily reliant on human advisors, wealth management is slowly but surely integrating AI. Even with the growing popularity of robo-advisors and other automated investment tools, a significant number of clients continue to favor traditional investment advisory services. Many financial advisors utilize AI technologies in preparation for client meetings, but a complete transition to full automation has yet to take place. “The experience of the finance industry suggests that human-facing services where data is not abundant and fast-changing can remain largely intact in a world of AI.” This preference is driven by the personalized feel and service human advisors provide to their clients. High-net-worth individuals, who often seek more personalized financial advice, remain the most resistant to fully automated investment services. They favor tailored strategies and trust that comes with human advisors. Although AI technologies are valuable for analyzing data before a financial advisor meets with a client, they can fall short of providing the emotional intelligence needed to establish trust and build rapport. For now, the goal in wealth management remains to find the right balance between leveraging powerful AI capabilities and maintaining the personal touch that clients highly value.

Lending

When it comes to AI, lending is another area within the finance sector that is still catching up. AI’s role in automating lending is made more complicated by the continual need for monitoring and updating data to ensure fair lending compliance. Lending decisions made by black-box AI models, creates interpretation challenges. Those models are so complex that its decision-making or internal processes cannot be easily explained by humans, thus making it challenging to assess how the outputs were created.

Regulatory compliance and potential data biases also slow down the adoption of customer-facing AI applications in lending. As Federal Reserve Governor Lael Brainard described the problem: “Depending on what algorithms are used, it is possible that no one, including the algorithm’s creators, can easily explain why the model generated the results that it did.” Using AI in lending carries risks, as transparency is crucial for preventing discrimination, ensuring fairness, and fulfilling disclosure requirements. “Data-driven algorithms may expedite credit assessment and reduce costs, but they also carry the risk of disparate impact in credit outcomes and the potential for fair lending violations.” The lack of explainability and the need to follow fair lending guidelines have slowed down AI’s complete integration into lending. However, explainable AI (XAI), a set of tools and techniques that helps people understand and trust the output of machine learning algorithms, can help address the crucial need for decision clarity and transparency in lending.

Conclusion

As analytical AI, generative AI, and hyperautomation continue to evolve, they promise to create a more efficient, secure, and accessible financial ecosystem, redefining the role of traditional institutions and expanding opportunities for both consumers and businesses. While strict regulatory compliance and data quality concerns have slowed AI’s full implementation into the financial sector, the technology continues to offer significant benefits in back-office automation, data aggregation, trading, customer service, predictive analytics, fraud prevention, and knowledge management. Despite its challenges, AI’s transformative potential in the world of finance can’t be ignored.

Begin your enterprise AI journey here and be sure to read our previous articles on key AI terms and how to build a winning AI strategy with the 5 Vs of data.

ABOUT ENTEFY

Entefy is an enterprise AI software and hyperautomation company. Entefy’s patented, multisensory AI technology delivers on the promise of the intelligent enterprise, at unprecedented speed and scale.

Entefy products and services help organizations transform their legacy systems and business processes—everything from knowledge management to workflows, supply chain logistics, cybersecurity, data privacy, customer engagement, quality assurance, forecasting, and more. Entefy’s customers vary in size from SMEs to large global public companies across multiple industries including financial services, healthcare, retail, and manufacturing.

To leap ahead and future proof your business with Entefy’s breakthrough AI technologies, visit www.entefy.com or contact us at contact@entefy.com.

Empowering the future workforce with university and industry partnerships

Recently, Ed Grier, Dean of Santa Clara University’s Leavey School of Business, moderated a panel featuring business leaders Nick Chong, Chief Customer Officer at Zoom, and Brienne Ghafourifar, Co-founder of Entefy. The panel session was part of AACSB’s (Association to Advance Collegiate Schools of Business) AI Conference, focused on preparing business leaders. This panel’s discussion shed light on the indispensable role of partnerships between universities and businesses (particularly technology businesses) in fostering meaningful dialogue, driving innovation, and enhancing the educational experience for students. AACSB accredits the top business schools in the world.

A key segment of the discussion centered on the strategic use of advanced technologies, such as machine learning and AI, to better prepare students for their academic and professional journeys. The panelists stressed the importance of integrating cutting-edge technology into the curriculum to equip students with the skills and knowledge required to thrive in an increasingly digital and automated world. By incorporating AI and other technological advancements into the educational framework, universities can better ensure success for their students during their academic tenure and beyond.

The conversation delved into the significance of fostering a culture of innovation within academic institutions. This involves creating an environment that encourages creative thinking, problem-solving, and interdisciplinary collaboration. The panelists highlighted the necessity of providing students with the tools and resources needed to develop as well-rounded leaders, capable of navigating and excelling in various fields. By nurturing cross-disciplinary strengths, universities can produce graduates who are versatile, adaptable, and well-equipped to meet the dynamic challenges of the modern workforce.

Overall, the panel discussion underscored the importance of business and technology partnerships in shaping the future of education. By aligning academic goals with industry needs, universities can play a pivotal role in developing the next generation of leaders who are prepared to drive innovation and success in their respective fields.

ABOUT ENTEFY

Entefy is an enterprise AI software and hyperautomation company. Entefy’s patented, multisensory AI technology delivers on the promise of the intelligent enterprise, at unprecedented speed and scale.

Entefy products and services help organizations transform their legacy systems and business processes—everything from knowledge management to workflows, supply chain logistics, cybersecurity, data privacy, customer engagement, quality assurance, forecasting, and more. Entefy’s customers vary in size from SMEs to large global public companies across multiple industries including financial services, healthcare, retail, and manufacturing.

To leap ahead and future proof your business with Entefy’s breakthrough AI technologies, visit www.entefy.com or contact us at contact@entefy.com.

Build a winning AI strategy with the 5 Vs of data

The digital age has ushered in an era of unprecedented data generation and management. From social media to smart sensor networks, to AI-powered systems, information flows at an ever-increasing rate. This creates a vast ocean of data that together with technology powers modern society. To navigate the complexities of today’s data for business and harness its transformative potential, we need to better understand data’s characteristics and why they matter. This is where the 5Vs of data come in:

1. Volume: Quantity Matters

Data Volume refers to the colossal and ever-increasing amount of information generated in today’s digital world. Traditional data management systems, designed for a bygone era of smaller, meticulously organized datasets, are simply overwhelmed by the sheer scale of big data.

Imagine a filing cabinet meant for neatly organized folders being flooded with a tidal wave of documents, logs, images, and videos—communication and social media posts (from emails to shared memes), sensor readings from billions of connected Internet of Things (IoT) devices, and machine-generated logs streaming in at an unrelenting pace. For many large organizations, this data deluge is measured not in megabytes or gigabytes but in terabytes (a trillion bytes), petabytes (a quadrillion bytes), and even exabytes (a mind-boggling quintillion bytes). The challenge lies not just in storing this vast ocean of information, but also in analyzing it efficiently to extract valuable insights.

Traditional methods simply struggle to keep up with the ever-growing volume of data, necessitating the development of innovative storage solutions, high-performance computing architectures, and scalable data processing techniques.

Question to ask when assessing data Volume at your organization: Is there sufficient data to properly support the target use case and the business objective?

2. Variety: A Tapestry of Data Formats

Data Variety refers to the diversity in data in terms of formats and structures. It encompasses not only the familiar structured data found in relational databases but also semi-structured and unstructured data.  

Structured data such as financial records, contact lists, or inventory control data, refers to data that has been organized using a predetermined model, often in the form of a table with values and linked relationships. Semi-structured data occupies a middle ground between the rigidity of structured data and the free-flowing nature of unstructured data. Examples of semi-structured data include log files, emails, social media posts. Unstructured data, the largest and most challenging category, is the wild west of big data. It refers to information that lacks a predefined format or organization, including free form text, images, videos, and audio files.

The variety of data formats poses a significant challenge for traditional data analysis tools designed solely for structured data. Extracting insights from unstructured data requires specialized techniques such as natural language processing (NLP) for text analysis, computer vision for image analysis, and audio signal processing for audio files.

Question to ask when assessing data Variety at your organization: To what extent does the data contain different types of objects or formats?

3. Veracity: Ensuring Data Quality and Trustworthiness

Data Veracity underscores the importance of data quality and reliability. It refers to the accuracy, completeness, consistency, and trustworthiness of the information being processed. Just as a shaky foundation compromises the integrity of a building, poor data Veracity undermines the reliability of any insight derived from data. Veracity is crucial to avoid false conclusions and, ultimately, poor decision-making.

The key pillars of data Veracity include accuracy, completeness, consistency, and trustworthiness. Accuracy refers to the degree to which data reflects the true state of the world it represents. Inaccurate data, whether due to errors in data entry, faulty sensors, or biased sources, may lead to misleading results. Completeness in data has to do with the holistic picture. Missing values or incomplete datasets can skew analysis and limit the potential for true insights and complete data is one that has no essential information missing. Consistency ensures that data adheres to predefined standards and formats. Inconsistencies, such as variations in units of measurement or date formats, can create confusion and hinder analysis. Trustworthiness refers to the source and lineage of data that are crucial for establishing trust. Data from unreliable sources or those with unclear origins can lead to misleading or confusing results.

Organizations can implement various strategies to safeguard data veracity. These strategies include a) Data Quality Management that establishes data quality checks and procedures throughout the data lifecycle, from collection to storage and analysis, b) Data Validation and Cleaning to identify and correct errors or inconsistencies present in the data, c) Data Source Validation to scrutinize the origin and reliability of data sources in order to minimize the risk of bias or inaccurate information, and d) Data Governance Framework that establishes clear policies that promote data quality, standardization, and access control.

Question to ask when assessing data Veracity at your organization: Is the data trustworthy and reliable with reasonable levels of quality and consistency?

4. Velocity: The Need for Speed in Data Flow

Data Velocity highlights the speed at which data is generated and needs to be processed. Aside from periodically updated datasets, today’s business often relies on real-time or near-real-time data generation and analysis. For instance, stock market fluctuations, news, traffic information, and sensor data from industrial machines all benefit from timely analysis to help make informed decisions.

Imagine a manufacturing plant where sensors monitor equipment performance. Traditional data analysis might involve periodic checks, potentially leading to missed opportunities or delayed responses to equipment malfunctions. Data generated at high speed can allow for continuous monitoring and real-time analysis, enabling predictive maintenance and mitigating costly downtime.

The high Velocity of data in many organizations is now requiring the implementation of new analytics tools and techniques capable of processing information streams efficiently. This includes systems powered by AI and machine learning that allow for near-instantaneous analysis of data, enabling organizations to react to market volatility, customer sentiment changes, or operational issues in real-time.

Question to ask when assessing data Velocity at your organization: How quickly is the data generated and at what rate does it need to be analyzed?

5. Value: Extracting Insights that Drive Results

Data Value encompasses the overall measurable impact that organizations can derive from their data. For business, this is the ultimate goal of data: extracting value from available data that may be otherwise idle. In the digital age, data has become the new gold. But unlike a physical treasure chest, data’s value isn’t inherent. It lies in its potential to be transformed into actionable insights that drive informed decision-making, optimize processes, and fuel innovation. Understanding data value and unlocking its potential is a critical skill for organizations of all sizes.

New technologies such as AI and machine learning play a significant role in extracting value from data, leading to previously unimaginable opportunities. Businesses can gain a deeper understanding of their customers, identify market trends, reduce costs, and make operations more efficient. Overall, organizations that embrace a data-driven culture and prioritize data Value are better positioned to thrive in an increasingly competitive market.

Question to ask when assessing data Value at your organization: Is the data of sufficient worth to support the business objectives?

Conclusion

The 5 Vs of data provides a framework for understanding the complexities and opportunities associated with data, especially in the context of data processing and analytics. By addressing the challenges of data Volume, Variety, Veracity, Velocity, and Value, organizations can unlock the true potential of this powerful resource. And, by considering these factors, organizations can leverage the power of data to build robust, reliable, and valuable AI and machine learning models that drive real-world result.

At Entefy, we are passionate about breakthrough technologies that save people time so they can live and work better. The 24/7 demand for products, services, and personalized experiences is compelling businesses to optimize and, in many cases, reinvent the way they operate to ensure resiliency and growth.

Begin your enterprise AI journey here and be sure to read our previous articles on key AI terms and the 18 skills needed to bring AI applications to life.

ABOUT ENTEFY

Entefy is an enterprise AI software and hyperautomation company. Entefy’s patented, multisensory AI technology delivers on the promise of the intelligent enterprise, at unprecedented speed and scale.

Entefy products and services help organizations transform their legacy systems and business processes—everything from knowledge management to workflows, supply chain logistics, cybersecurity, data privacy, customer engagement, quality assurance, forecasting, and more. Entefy’s customers vary in size from SMEs to large global public companies across multiple industries including financial services, healthcare, retail, and manufacturing.

To leap ahead and future proof your business with Entefy’s breakthrough AI technologies, visit www.entefy.com or contact us at contact@entefy.com.

Entefy co-founders speak on AI and its implications for governance Boards

The landscape of corporate governance is undergoing a significant transformation. Artificial intelligence, including generative AI, is rapidly weaving its way into the fabric of business operations, and boardrooms are no exception. From strategic decision-making to risk management, AI and machine learning present a unique set of opportunities and challenges for boards of directors. 

On this topic, Entefy sibling co-founders, Alston Ghafourifar and Brienne Ghafourifar, were invited to speak at Silicon Valley Directors’ Exchange (SVDX) to explain the very nature of AI today, its potential to disrupt business and industry, and how board directors can wrap their heads around the implications. This exclusive 1-hour session focused on the intricate relationship between AI and corporate governance, exploring its impact on board composition, function, and oversight. 

An organization’s governance board has an obligation to ensure that operations are aligned with strategy and safeguarded against potential disruptions or competitive threats. This SVDX session was designed to equip board members and corporate leaders with the knowledge necessary to harness the power of AI technology and develop AI strategies for responsible and effective governance.

During the session, Alston and Brienne shared their experiences and perspectives on how AI can augment a board’s capabilities and identify potential risks associated with its implementation and use. Among other topics, they proposed best practices for navigating this complex and ever-evolving technology landscape. 

ABOUT ENTEFY

Entefy is an enterprise AI software and hyperautomation company. Entefy’s patented, multisensory AI technology delivers on the promise of the intelligent enterprise, at unprecedented speed and scale.

Entefy products and services help organizations transform their legacy systems and business processes—everything from knowledge management to workflows, supply chain logistics, cybersecurity, data privacy, customer engagement, quality assurance, forecasting, and more. Entefy’s customers vary in size from SMEs to large global public companies across multiple industries including financial services, healthcare, retail, and manufacturing.

To leap ahead and future proof your business with Entefy’s breakthrough AI technologies, visit www.entefy.com or contact us at contact@entefy.com.

The indispensable guide to effective corporate AI policy

Artificial Intelligence (AI) has become the cornerstone of modern innovation, permeating diverse sectors of the economy and revolutionizing the way we live and work. Today, we stand at a crucial crossroads: one where the path we choose determines if AI fosters a brighter future or casts a long shadow of ethical quandaries. To embrace the former, we must equip ourselves with a moral compass – a comprehensive guide to developing and deploying AI with trust and responsibility at its core. This Entefy policy guide provides a practical framework for organizations dedicated to fostering ethical, trustworthy, and responsible AI.

According to version 1.0 of its AI Risk Management Framework (AI RMF), the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) views trustworthy AI systems as those sharing a number of characteristics. Trustworthy AI systems are typically “valid and reliable, safe, secure and resilient, accountable and transparent, explainable and interpretable, privacy-enhanced, and fair with harmful bias managed.” Further, validity and reliability are required criteria for trustworthiness while accountability and transparency are connected to all other characteristics. Naturally, trustworthy AI isn’t just about technology; it is intricately connected to data, organizational values, as well as the human element involved in designing, building, and managing such systems.

The following principles can help guide every step of development and usage of AI applications and systems in your organization:

1. Fairness and Non-Discrimination

Data represents the bloodline of AI. And regrettably, not all datasets are created equal. In many cases, bias in data can translate into bias in AI model behavior. Such biases can have legal or ethical implications in areas such as crime prediction, loan scoring, or job candidate assessment. Therefore, actively seek and utilize datasets that reflect the real world’s diversity and the tapestry of human experience. To promote fairness and avoid perpetuating historical inequalities, try to go beyond readily available data and invest in initiatives that collect data from underrepresented groups.

Aside from using the appropriate datasets, employing fairness techniques in algorithms can shield against hidden biases. Techniques such as counterfactual fairness or data anonymization can help neutralize biases within the algorithms themselves, ensuring everyone is treated equally by AI models regardless of their background. Although these types of techniques represent positive steps forward, they are inherently limited since recognizing perfect fairness may not be achievable.

Regular bias audits are also recommended to stay vigilant against unintended discrimination. These audits can be conducted by independent experts or specialized internal committees consisting of members who represent diverse perspectives. To be effective, such audits should include scrutinizing data sources, algorithms, and outputs, identifying potential biases, and recommending mitigation strategies.

2. Transparency and Explainability

Building trust in AI requires transparency and explainability in how these intelligent systems make decisions. In many cases, advanced models using deep learning such as large language models (LLMs) are categorized as impenetrable black boxes. Black box AI is a type of artificial intelligence system that is so complex that its decision-making or internal processes cannot be easily explained by humans, thus making it challenging to assess how the outputs were created. This lack of transparency can erode trust and lead to poor decision-making.

Promoting transparency and explainability in AI models is essential for responsible AI development. To whatever extent practicable, use interpretable models, explainable AI (XAI)— a set of tools and techniques that helps people understand and trust the output of machine learning algorithms—and modular architecture where the model is divided into smaller, more understandable components. Visual dashboards can present data trends and model behavior in easier-to-understand formats as well.

Building trust in AI requires openness and inclusivity. Start with demystifying the field by inviting diverse voices and perspectives into the conversation. This means engaging with communities most likely to be impacted by AI, fostering public dialogue about its benefits and risks, and proactively addressing concerns.

Transparency and explainability need to be part of continuous improvement to foster trust, allowing users to engage with AI as informed partners. Encourage user feedback on the clarity and effectiveness of explanations, continuously refining the efforts to make AI more understandable.

3. Privacy and Security

AI’s dependence on sensitive or personal data raises significant concerns about privacy and security. Implementing robust data protection frameworks is crucial for ensuring user privacy and safeguarding against data breaches or criminal misuse.

Machine learning models trained on private datasets can expose private information in surprising ways. It is not uncommon for AI models, including large language models (LLMs), to be trained on private datasets, which may include personally identifiable information (PII).   Research has exposed cases where “an adversary can perform a training data extraction attack to recover individual training examples by querying the language model.” 

Privacy-preserving machine learning (PPML) can be used to help in maintaining confidentiality of private and sensitive information. PPML is a collection of techniques that allow machine learning models to be trained and used without revealing the sensitive, private data that they were trained on. PPML practices, including data anonymization, differential privacy, and federated learning, among others, help protect identities and proprietary information while preserving valuable insights for analysis.

In a world where AI holds the keys to intimate and, in some cases, critical data, strong encryption and access controls are vital in safeguarding user privacy. The regulatory landscape for data protection and security has been evolving over the years but now with the latest advances in machine learning, AI-specific regulations are taking center stage globally. The effectiveness of these regulations, however, depends on enforcement mechanisms and industry self-regulation. Collaborative efforts among governments, businesses, and researchers are crucial to ensure responsible AI development that respects data privacy and security.

In addition to regulatory pressures, organizations are learning the benefits of providing clear and accessible privacy policies to their customers, employees, and other stakeholders, obtaining informed consent for data collection and usage, and offering mechanisms for users to access, rectify, or delete their data.

Beyond technical, regulatory, or policy measures, organizations need to also build a culture of privacy. This involves continual employee training on security and data privacy best practices, conducting internal audits to identify and address vulnerabilities, and proactively communicating credible threats or data breaches to stakeholders.

4. Accountability and Human Oversight

Even the best intended AI models can stray in terms of results or decisions. This is where human oversight is key, ensuring responsible AI at every stage. Clearly defined roles and responsibilities ensure that individuals are held accountable for ethical oversight, compliance, and adherence to established ethical standards throughout the AI lifecycle. Ethical review boards comprising multidisciplinary experts play a pivotal role in evaluating the ethical implications of AI projects. These boards provide invaluable insights, helping align initiatives with organizational values and responsible AI guidelines.

Continual risk assessment plus maintaining comprehensive audit trails and documentation are equally important. In assessing the risks, consider not just technical implications but also potential social, environmental, and ethical impact of AI systems.

Each organization can benefit from clear protocols for human intervention in AI decision-making. This involves establishing human-in-the-loop systems for critical decisions, setting thresholds for human intervention when certain parameters are met, or creating mechanisms for users to appeal or challenge AI decisions.

5. Safety and Reliability

To truly harness the power of AI without unleashing its potential dangers, rigorous safety and reliability measures must be included in an organization’s AI policies and practices. These safeguards should be multifaceted, ensuring not just technical accuracy but also ethical integrity.

Begin with stress testing and simulations of adversarial scenarios. Subject the AI systems to strenuous testing, including edge cases, unexpected inputs, and potential adversarial attacks. This stress testing identifies vulnerabilities and allows for implementation of safeguards. Build in fail-safe mechanisms that automatically intervene or shut down operations in case of critical errors. Consider redundancy mechanisms to maintain functionality even if individual components malfunction. In addition, actively monitor AI systems for potential issues, anomalies, or performance degradation. Conduct regular audits to assess their safety and reliability.

Safety-critical applications, such as those in healthcare, transportation, or energy demand even stricter testing protocols and fail-safe mechanisms to prevent even the most unlikely mishaps. In cases of malfunctions, the AI system should degrade to a safe state in order to prevent harm. Continuous monitoring and data collection allow for better problem detection and resolution to unforeseen issues. This necessitates building AI systems that generate logs and provide insights into their internal processes, enabling developers to identify anomalies and intervene promptly.

6. Human Agency and Control

As the field of machine intelligence evolves, the human-AI partnership grows stronger, yet more complex. Collaboration between people and intelligent machines can take many forms. AI can act as a tireless assistant, freeing up people’s time for more strategic or creative tasks. It can offer personalized recommendations or automate repetitive processes, enhancing overall efficiency. But the human element remains critical in providing context, judgment, and ethical considerations that AI, for now, still lacks.

In creating trustworthy AI, intelligent machines should empower, not replace, human agency. The goal is to design systems that augment or strengthen human capabilities, not usurp them. Design AI systems where the user has clear, accessible mechanisms to override AI decisions or opt-out of its influence. This involves providing user interfaces that have clear parameters for human control or creating AI systems that actively solicit user input before making critical decisions.

Embrace user-centered design to make AI interfaces intuitive and understandable. This provides users the ability to readily comprehend the reasoning behind AI recommendations and make informed decisions about whether to accept or override them. Ultimately, the relationship between humans and intelligent machines should be one of collaboration. AI remains a powerful tool at our service, empowering us to achieve more than we could alone while respecting our right to control and direct its actions.

7. Social and Environmental Impact

The ripples of AI extend far beyond the technical realm. It promises to power society in unprecedented ways and solve some of humanity’s longest-lasting challenges in medicine, energy, manufacturing, sustainability. The development and usage of responsible AI requires adoption of a holistic view. One that considers the potential for social and environmental implications. This requires a proactive approach, considering not only the intended benefits but also the unintended consequences of deploying AI systems.

Automation powered by AI could lead to significant job losses across various industries including manufacturing, transportation, media, legal, education, and finance. While new jobs may emerge in other sectors, the transition may be painful and disruptive for displaced workers and communities. Concerns arise about how to provide support and retraining for those affected, as well as ensuring equitable access to the new opportunities created by AI.

As part of the policies for creating trustworthy AI, sustainability serves as the North Star, guiding us towards solutions that minimize environmental and social harm while promoting responsible resource management. Properly designed, AI can server as a powerful tool for combatting climate change, optimizing resource utilization, and fostering sustainable development.

Conducting comprehensive impact assessments prior to AI deployment is imperative to gauge potential societal implications. Proactive measures to mitigate negative effects are necessary to ensure that AI advancements contribute positively to societal well-being. Remaining responsive to societal concerns and feedback is equally crucial. Organizations should demonstrate adaptability to evolving ethical standards and community needs, thereby fostering a culture of responsible AI usage.

8. Continuous Improvement

The quest for responsible AI isn’t a destination, but a continuous journey. Embrace a culture of learning and improvement, constantly seeking new tools, techniques, and insights to refine practices. Collaboration becomes the fuel that drives teams to learn from experts, partner with diverse voices, and engage in open dialogue about responsible AI development.

Sharing research findings, conducting public forums, and participating in industry initiatives are essential aspects of the trustworthy AI journey. Fostering an open and collaborative environment allows us to collectively learn from successes and failures, identify emerging challenges, and refine our understanding of responsible AI principles.

Continuous improvement doesn’t always translate to rapid advancement. Sometimes it requires taking a step back, reassessing approaches, and making necessary adjustments to ensure that the organization’s AI endeavors remain aligned with ethical principles and social responsibility.

Conclusion

Responsible AI development and usage at any organization requires team commitment, the willingness to embrace complex challenges, and agreement to continuous improvement as a foundational principle. By embedding these AI policy guidelines, your organization can build AI that isn’t only powerful, but also trustworthy, inclusive, and beneficial for all.

Begin your Enterprise AI journey, here, learn more about artificial general intelligence (AGI), and avoid the 5 common missteps in bringing AI projects to life.

ABOUT ENTEFY

Entefy is an enterprise AI software and hyperautomation company. Entefy’s patented, multisensory AI technology delivers on the promise of the intelligent enterprise, at unprecedented speed and scale.

Entefy products and services help organizations transform their legacy systems and business processes—everything from knowledge management to workflows, supply chain logistics, cybersecurity, data privacy, customer engagement, quality assurance, forecasting, and more. Entefy’s customers vary in size from SMEs to large global public companies across multiple industries including financial services, healthcare, retail, and manufacturing.

To leap ahead and future proof your business with Entefy’s breakthrough AI technologies, visit www.entefy.com or contact us at contact@entefy.com

Navigating the labyrinth of fast-evolving AI regulation

The world stands at the precipice of a new era, one where artificial intelligence (AI) is poised to revolutionize every facet of human life. From healthcare to education, finance, retail, entertainment, and supply chain, AI promises to reshape our experiences in ways both subtle and profound. Yet, with such immense power comes an equally immense responsibility: to ensure that AI is developed and deployed responsibly, ethically, and in a manner that benefits all of humanity.

One of the most critical tools in this endeavor is effective regulation and guardrails designed to safeguard against individual and societal harm. Governments around the world are grappling with the complex and multifaceted challenge of crafting regulatory frameworks that foster innovation while mitigating the potential risks associated with AI and, more specifically, artificial general intelligence (AGI). This task is akin to navigating a labyrinth, where each turn presents new challenges and opportunities.

The regulatory landscape for building trustworthy AI

Building trustworthy AI involves addressing various concerns such as algorithmic biases, data privacy, transparency, accountability, and the potential societal impacts of AI. At present, multiple corporate and governmental initiatives are underway to create ethical guidelines, codes of conduct, and regulatory frameworks that promote fairness, accountability, and transparency in AI development and deployment. Collaborative efforts between industry leaders, policymakers, ethicists, and technologists aim to embed ethical considerations into the entire AI lifecycle, fostering the creation of AI systems that benefit society while respecting fundamental human values and rights. The goal is to navigate the complexities of AI advancements while upholding principles that prioritize human well-being and ethical standards.

Increasingly, large corporations and government entities alike are taking key steps aimed at protecting consumers and society at large. Leading the charge is perhaps the European Union, taking a bold step towards comprehensive regulation in the field with its EU AI Act. This legislation, the first of its kind on a global scale, establishes a risk-based approach to AI governance. By classifying AI systems into four risk tiers based on their potential impact, the Act imposes varying levels of oversight. Thus, promoting responsible development while encouraging innovation.

Across the Atlantic, the United States has taken a more decentralized approach to AI regulation. Rather than a single national law, the U.S. is relying on a patchwork of guidelines issued by different states. This fragmented approach can lead to inconsistencies and uncertainties, potentially hindering responsible AI development. In this regard, the U.S. Chamber of Commerce has raised concerns, stating that such a patchwork approach to AI regulation “threatens to slow the realization of [AI] benefits and stifle innovation, especially for small businesses that stand to benefit the most from the productivity boosts associated with AI.”

Here are several specific examples of initiatives worldwide that have emerged to help ensure ethical AI development:

  • As an early leader in this area, the European Commission drafted “The Ethics Guidelines for Trustworthy Artificial Intelligence (AI)” to promote ethical principles for organizations, developers, and society at large. On December 8, 2023, after intense negotiations among policymakers, the European Union reached agreement on its landmark AI legislation, the AI Act. This agreement clears the way for the most ambitious set of principles yet to help control the technology. “The proposed regulations would dictate the ways in which future machine learning models could be developed and distributed within the trade bloc, impacting their use in applications ranging from education to employment to healthcare.” 
  • The first comprehensive regulatory framework for AI was proposed in the EU in April 2021 and is expected to be adopted in 2024. This EU Artificial Intelligence Act represents the first official regulation in the field of AI aimed at the protection of the rights, health, and safety of its people. The new rules will categorize AI by risk levels and prohibit certain practices, with full bans on predictive policing and biometric surveillance, mandatory disclosure requirements by generative AI systems, and protection against AI systems that are used to sway elections or influence voters.
  • According to a joint paper, Germany, France, and Italy have reached agreement on the treatment of AI and how it should be regulated. “The three governments support ‘mandatory self-regulation through codes of conduct’ for so-called foundation models of AI, which are designed to produce a broad range of outputs.”
  • The Organisation for Economic Co-operation and Development (OECD) AI Principles call for accountability and responsibility in developing and deploying AI systems. These principles emphasize human-centered values and transparency, providing guidelines for policymakers, developers, and users.
  • Big tech, including Amazon, Google, Microsoft, and Meta, has agreed to meet a set of AI safeguards. President Biden recently “announced that his administration has secured voluntary commitments from seven U.S. companies meant to ensure that their AI products are safe before they release them. Some of the commitments call for third-party oversight of the workings of the next generation of AI systems.”
  • In 2023, the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) released the version 1.0 of its AI Risk Management Framework (AI RMF). “The AI RMF follows a direction from Congress for NIST to develop the framework and was produced in close collaboration with the private and public sectors. It is intended to adapt to the AI landscape as technologies continue to develop, and to be used by organizations in varying degrees and capacities so that society can benefit from AI technologies while also being protected from its potential harms.”

Key challenges in AI regulation

Delving deeper into the intricacies of AI regulation exposes a set of sophisticated challenges ahead:

Risk Assessment. Effectively managing the risks associated with AI requires robust risk assessment frameworks. Determining the level of risk posed by different AI systems is a complex task, demanding a nuanced and objective evaluation of potential harms.

Data Privacy and Security. AI’s dependence on personal or proprietary data raises significant concerns about privacy and security. Implementing robust data protection frameworks is crucial for ensuring user privacy and safeguarding against data breaches or criminal misuse.

Transparency and Explainability. Building trust in AI requires transparency and explainability in how these intelligent systems make decisions. In many cases, advanced models using deep learning such as large language models (LLMs) are categorized as black boxes. Black box AI is a type of artificial intelligence system that is so complex that its decision-making or internal processes cannot be easily explained by humans, thus making it challenging to assess how the outputs were created. Regulations mandating transparency are essential for responsible AI development and ensuring accountability for potential harm.

Algorithmic Bias and Discrimination. This is the invisible enemy in AI. Intelligent systems can inadvertently perpetuate harmful biases based on factors such as race, gender, and socioeconomic status. Addressing this issue necessitates policy and regulation that promotes fairness, transparency, and accountability in development and deployment of algorithmic models.

The case for ethical AI

The need for professional responsibility in the field of artificial intelligence cannot be understated. There are many high-profile cases of algorithms exhibiting biased behavior resulting from the data used in their training. The examples that follow add more weight to the argument that AI ethics are not just beneficial, but essential:

  • Data challenges in predictive policing. AI-powered predictive policing systems are already in use in cities including Atlanta and Los Angeles. These systems leverage historic demographic, economic, and crime data to predict specific locations where crime is likely to occur. However, the ethical challenges of these systems became clear in a study of one popular crime prediction tool. The predictive policing system developed by the Los Angeles Police Department in conjunction with university researchers, was shown to worsen the already problematic feedback loop present in policing and arrests in certain neighborhoods. An attorney from the Electronic Frontier Foundation said, “‘if predictive policing means some individuals are going to have more police involvement in their life, there needs to be a minimum of transparency.”’
  • Unfair credit scoring and lending. Operating on the premise that “all data is credit data,” machine learning systems are being designed across the financial services industry to determine creditworthiness using not only traditional credit data, but also social media profiles, browsing behaviors, and purchase histories. The goal on the part of a bank or other lender is to reduce risk by identifying individuals or businesses most likely to default. Research into the results of these systems has identified cases of bias such as two businesses of similar creditworthiness receiving different scores due to the neighborhood in which each business is located. According to Deloitte, the bias in AI can come from the input data, how the engineers may impact the model training, and in post-training where there is “continuous learning drift towards discrimination.
  • Biases introduced into natural language processing. Computer vision and natural language processing (NLP) are subfields of artificial intelligence that give computer systems digital eyes, ears, and voices. Keeping human bias out of those systems is proving to be challenging. One Princeton study into AI systems that leverage information found online showed that the biases people exhibit can make their way into AI algorithms via the systems’ use of Internet content. The researchers observed “that human-like semantic biases result from the application of standard machine learning to ordinary language—the same sort of language humans are exposed to every day.” This matters because other solutions and systems often use machine learning models that were trained on similar types of datasets.

    Today, large language models (LLMs), pre-trained on massive datasets with billions of parameters, are more powerful than ever and can generate new content. The positive opportunities created by LLMs and generative AI are endless but that all comes with a set of risks. These risks include discriminatory outputs, hallucinations where the LLMs generate false information, or “plausible-sounding reason, based on a process of predicting which words go together,” without actual reasoning. 
  • Limited effectiveness of health care diagnosis. There is limitless potential for AI-powered systems to improve patients’ lives using trustworthy and ethical AI. Entefy has written extensively on the topic, including the analysis of 9 paths to AI-powered affordable health care, how machine learning can outsmart coronavirus, improving the relationship between patients and doctors, and AI-enabled drug discovery and development.

    The ethical AI considerations in the health care industry emerge from the data and whether the data includes biases tied to variability in the general population’s access to and quality of health care. Data from past clinical trials, for instance, is likely to be far less diverse than the face of today’s patient population. Said one researcher, “At its core, this is not a problem with AI, but a broader problem with medical research and healthcare inequalities as a whole. But if these biases aren’t accounted for in future technological models, we will continue to build an even more uneven healthcare system than what we have today.” AI systems can reflect and perpetuate existing societal biases, leading to unfair outcomes for certain groups of people. This is particularly true for disadvantaged populations, who may receive inaccurate or inadequate care due to biased algorithmic predictions.
  • Impaired judgement in the criminal justice system. AI is performing a number of tasks for courts such as supporting judges in bail hearings and sentencing. One study of algorithmic risk assessment in criminal sentencing revealed the need for removing bias from some of their systems. Examining the risk scores of more than 7,000 people arrested in Broward County, Florida, the study concluded that the system was not only inaccurate but plagued with biases. For example, it was only 20% accurate in predicting future violent crimes and twice as likely to inaccurately flag African American defendants as likely to commit future crimes. Yet these systems contribute to sentencing and parole decisions. And in cases where policing is more active in some communities than others, biases may exist in the underlying data. “An algorithm trained on this data would pick up on these biases within the criminal justice system, recognize it as a pattern, and produce biased decisions based on that data.”

The road ahead for AI regulation will be paved by collaborative efforts towards responsible AI. As we navigate the road ahead, the landscape is expected to continue evolving rapidly. We can anticipate a global surge in the development and implementation of national and regional AI regulations, increased focus on advanced risk management and mitigation strategies, and continued collaboration on the development of international standards and best practices for responsible AI governance.

Conclusion

The effective regulation of AI is not simply a technical challenge; it is a call to action for all stakeholders, including governments, businesses, researchers, and individuals. By engaging in open dialogue, adopting responsible development practices, and actively participating in the regulatory process, we can collectively foster a future where AI serves as a force for good. A force that protects consumers, empowers innovation, and creates a more equitable and prosperous world for all.

To learn more, be sure to read Entefy’s guide to essential AI terms and our previous article about AI ethics and ways to ensure trustworthy AI for your organization.

ABOUT ENTEFY

Entefy is an enterprise AI software and hyperautomation company. Entefy’s patented, multisensory AI technology delivers on the promise of the intelligent enterprise, at unprecedented speed and scale.

Entefy products and services help organizations transform their legacy systems and business processes—everything from knowledge management to workflows, supply chain logistics, cybersecurity, data privacy, customer engagement, quality assurance, forecasting, and more. Entefy’s customers vary in size from SMEs to large global public companies across multiple industries including financial services, healthcare, retail, and manufacturing. 

To leap ahead and future proof your business with Entefy’s breakthrough AI technologies, visit www.entefy.com or contact us at contact@entefy.com

AI Glossary: The definitive guide to essential terms in artificial intelligence

Artificial intelligence (AI) is the simulation of human intelligence in machines. Today, AI systems can learn and adapt to new information and can perform tasks that would normally require human intelligence. Machine learning is already having an impact in diagnosing diseases, developing new drugs, designing products, and automating tasks in a wide range of industries. It is also being used to create new forms of entertainment and education. As one of the most transformative technologies in history, advanced AI holds the potential to change our way of life and power society in ways previously unimaginable.

With the current pace of change, navigating the field of AI and machine intelligence can be daunting. To understand AI and its implications, it is important to have a basic understanding of the key terms and concepts. AI education and training can give you and your organization an edge. To this end, our team at Entefy has written this AI glossary to provide you with a comprehensive overview of practical AI terms. This glossary is intended for a broad audience, including students, professionals, and tech enthusiasts who are interested in the rapidly evolving world of machine intelligence.

We encourage you to bookmark this page for quick reference in the future.

A

Activation function. A mathematical function in a neural network that defines the output of a node given one or more inputs from the previous layer. Also see weight.

Algorithm. A procedure or formula, often mathematical, that defines a sequence of operations to solve a problem or class of problems.

Agent (also, software agent). A piece of software that can autonomously perform tasks for a user or other program(s).

AIOps. A set of practices and tools that use artificial intelligence capabilities to automate and improve IT operations tasks.

Annotation. In ML, the process of adding labels, descriptions, or other metadata information to raw data to make it more informative and useful for training machine learning models. Annotations can be performed manually or automatically. Also see labeling and pseudo-labeling.

Anomaly detection. The process of identifying instances of an observation that are unusual or deviate significantly from the general trend of data. Also see outlier detection.

Artificial general intelligence (AGI) (also, strong AI). The term used to describe a machine’s intelligence functionality that matches human cognitive capabilities across multiple domains. Often characterized by self-improvement mechanisms and generalization rather than specific training to perform in narrow domains.

Artificial intelligence (AI). The umbrella term for computer systems that can interpret, analyze, and learn from data in ways similar to human cognition.

Artificial neural network (ANN) (also, neural network). A specific machine learning technique that is inspired by the neural connections of the human brain. The intelligence comes from the ability to analyze countless data inputs to discover context and meaning.

Artificial superintelligence (ASI). The term used to describe a machine’s intelligence that is well beyond human intelligence and ability, in virtually every aspect.

Attention mechanism. A mechanism simulating cognitive attention to allow a neural network to focus dynamically on specific parts of the input in order to improve performance.

Autoencoder. An unsupervised learning technique for artificial neural network, designed to learn a compressed representation (encoding) for a set of unlabeled data, typically for the purpose of dimensionality reduction.

AutoML. The process of automating certain machine learning steps within a pipeline such as model selection, training, and tuning.

B

Backpropagation. A method of optimizing multilayer neural networks whereby the output of each node is calculated and the partial derivative of the error with respect to each parameter is computed in a backward pass through the graph. Also see model training.

Bagging. In ML, an ensemble technique that utilizes multiple weak learners to improve the performance of a strong learner with focus on stability and accuracy.

Bias. In ML, the phenomenon that occurs when certain elements of a dataset are more heavily weighted than others so as to skew results and model performance in a given direction.

Bigram. An n-gram containing a sequence of 2 words. Also see n-gram.

Black box AI. A type of artificial intelligence system that is so complex that its decision-making or internal processes cannot be easily explained by humans, thus making it challenging to assess how the outputs were created. Also see explainable AI (XAI).

Boosting. In ML, an ensemble technique that utilizes multiple weak learners to improve the performance of a strong learner with focus on reducing bias and variance.

C

Cardinality. In mathematics, a measure of the number of elements present in a set.

Categorical variable. feature representing a discrete set of possible values, typically classes, groups, or nominal categories based on some qualitative property. Also see structured data.

Centroid model. A type of classifier that computes the center of mass of each class and uses a distance metric to assign samples to classes during inference.

Chain of thought (CoT). In ML, this term refers to a series of reasoning steps that guides an AI model’s thinking process when creating high quality, complex output. Chain of thought prompting is a way to help large language models solve complex problems by breaking them down into smaller steps, guiding the LLM through the reasoning process.

Chatbot. A computer program (often designed as an AI-powered virtual agent) that provides information or takes actions in response to the user’s voice or text commands or both. Current chatbots are often deployed to provide customer service or support functions.

Class. A category of data indicated by the label of a target attribute.

Class imbalance. The quality of having a non-uniform distribution of samples grouped by target class.

Classification. The process of using a classifier to categorize data into a predicted class.

Classifier. An instance of a machine learning model trained to predict a class.

Clustering. An unsupervised machine learning process for grouping related items into subsets where objects in the same subset are more similar to one another than to those in other subsets.

Cognitive computing. A term that describes advanced AI systems that mimic the functioning of the human brain to improve decisionmaking and perform complex tasks.

Computer vision (CV). An artificial intelligence field focused on classifying and contextualizing the content of digital video and images. 

Convergence. In ML, a state in which a model’s performance is unlikely to improve with further training. This can be measured by tracking the model’s loss function, which is a measure of the model’s performance on the training data.   

Convolutional neural network (CNN). A class of neural network that utilizes multilayer perceptron, where each neuron in a hidden layer is connected to all neurons in the next layer, in conjunction with hidden layers designed only to filter input data. CNNs are most commonly applied to computer vision. 

Corpus. A collection of text data used for linguistic research or other purposes, including training of language models or text mining.

Central processing unit (CPU). As the brain of a computer, the CPU is the essential processor responsible for interpreting and executing a majority of a computer’s instructions and data processing. Also see graphics processing unit (GPU).

Cross-validation. In ML, a technique for evaluating the generalizability of a machine learning model by testing the model against one or more validation datasets.

D

Data augmentation. A technique to artificially increase the size and diversity of a training dataset by creating new data points from existing data. This can be done by applying various transformations to the existing data.

Data cleaning. The process of improving the quality of dataset in preparation for analytical operations by correcting, replacing, or removing dirty data (inaccurate, incomplete, corrupt, or irrelevant data).

Data preprocessing. The process of transforming or encoding raw data in preparation for analytical operations, often through re-shaping, manipulating, or dropping data.

Data curation. The process of collecting and managing data, including verification, annotation, and transformation. Also see training and dataset.

Data mining. The process of targeted discovery of information, patterns, or context within one or more data repositories.

DataOps. Management, optimization, and monitoring of data retrieval, storage, transformation, and distribution throughout the data life cycle including preparation, pipelines, and reporting.

Deepfake. Fabricated media content (such as image, video, or recording) that has been convincingly manipulated or generated using deep learning to make it appear or sound as if someone is doing or saying something they never actually did.    

Deep learning. A subfield of machine learning that uses neural networks with two or more hidden layers to train a computer to process data, recognize patterns, and make predictions.

Derived feature. A feature that is created and the value of which is set as a result of observations on a given dataset, generally as a result of classification, automated preprocessing, or sequenced model output.

Descriptive analytics. The process of examining historical data or content, typically for the purpose of reporting, explaining data, and generating new models for current or historical events. Also see predictive analytics and prescriptive analytics.

Dimensionality reduction. A data preprocessing technique to reduce the number of input features in a dataset by transforming high-dimensional data to a low-dimensional representation.

Discriminative model. A class of models most often used for classification or regression that predict labels from a set of features. Synonymous with supervised learning. Also see generative model.

Double descent. In machine learning, a phenomenon in which a model’s performance initially improves with increasing data size, model complexity, and training time, then degrades before improving again.

E

Ensembling. A powerful technique whereby two or more algorithms, models, or neural networks are combined in order to generate more accurate predictions.

Embedding. In ML, a mathematical structure representing discrete categorical variables as a continuous vector. Also see vectorization.

Embedding space. An n-dimensional space where features from one higher-dimensional space are mapped to a lower dimensional space in order to simplify complex data into a structure that can be used for mathematical operations. Also see dimensionality reduction.

Emergence. In ML, the phenomenon where a model develops new abilities or behaviors that are not explicitly programmed into it. Emergence can occur when a model is trained on a large and complex dataset, and the model is able to learn patterns and relationships that the programmers did not anticipate.

Enterprise AI. An umbrella term referring to artificial intelligence technologies designed to improve business processes and outcomes, typically for large organizations.

Expert System. A computer program that uses a knowledge base and an inference engine to emulate the decision-making ability of a human expert in a specific domain.

Explainable AI (XAI). A set of tools and techniques that helps people understand and trust the output of machine learning algorithms.

Extreme Gradient Boosting (XGBoost). A popularmachine learninglibrary based on gradient boosting and parallelization to combine the predictions from multiple decision trees. XGBoost can be used for a variety of tasks, including classification, regression, and ranking.

F

F1 Score. A measure of a test’s accuracy calculated as the harmonic mean of precision and recall.

Feature. In ML, a specific variable or measurable value that is used as input to an algorithm.

Feature engineering. The process of designing, selecting, and transforming features extracted from raw input to improve the performance of machine learning models. 

Feature vector (also, vector). In ML, a one-dimensional array of numerical values mathematically representing data points, features, or attributes in various algorithms and models.

Federated learning. A machine learning technique where the training for a model is distributed amongst multiple decentralized servers or edge devices, without the need to share training data.

Few-shot learning. A machine learning technique that allows a model to perform a task after seeing only a few examples of that task. Also see one-shot learning and zero-shot learning.

Fine-tuning. In ML, the process by which the hyperparameters of a model are adjusted to improve performance against a given dataset or target objective.

Foundation model. A large, sophisticated deep learning model pre-trained on a massive dataset (typically unlabeled), capable of performing a number of diverse tasks. Instead of training a single model for a single task, which would be difficult to scale across countless tasks, a foundation model can be trained on a broad dataset once and then used as the “foundation” or basis for training with minimal fine-tuning to create multiple task-specific models. Also see large language model.

G

Generative adversarial network (GAN). A class of AI algorithms whereby two neural networks compete against each other to improve capabilities and become stronger.

Generative AI (GenAI). A subset of machine learning with deep learning models that can create new, high-quality content, such as text, images, music, videos, and code. Generative AI models are trained on large datasets of existing content and learn to generate new content that is similar to the training data.

Generative model. A model capable of generating new data based on a given set of training data. Also see discriminative model.

Generative Pre-trained Transformer (GPT). A special family of models based on the transformer architecture—a type of neural network that is well-suited for processing sequential data, such as text. GPT models are pre-trained on massive datasets of unlabeled text, allowing them to learn the statistical relationships between words and phrases, and to generate text that is similar to the training data.

Graphics processing unit (GPU). A specialized microprocessor that accelerates graphics rendering and other computationally intensive tasks, such as training and running complex, large deep learning models. Also see central processing unit (CPU).

Gradient boosting. An ML technique where an ensemble of weak prediction models, such as decision trees, are trained iteratively in order to improve or output a stronger prediction model. Also see Extreme Gradient Boosting (XGBoost).

Gradient descent. An optimization algorithm that iteratively adjusts the model’s parameters to minimize the loss function by following the negative gradient (slope) of the functions. Gradient descent keeps adjusting the model’s settings until the error is very small, which means that the model has learned to predict the training data accurately.

Ground truth. Information that is known (or considered) to be true, correct, real, or empirical, usually for the purpose of training models and evaluating model performance.

H

Hallucination. In AI, a phenomenon wherein a model generates inaccurate or nonsensical output that is not supported by the data it was trained on.

Hidden layer. A construct within a neural network between the input and output layers which perform a given function, such as an activation function, for model training. Also see deep learning.

Hyperparameter. In ML, a parameter whose value is set prior to the learning process as opposed to other values derived by virtue of training.

Hyperparameter tuning. The process of optimizing a machine learningmodel’s performance by adjusting its hyperparameters.

Hyperplane. In ML, a decision boundary that helps classify data points from a single space into subspaces where each side of the boundary may be attributed to a different class, such as positive and negative classes. Also see support vector machine.

I

Inference. In ML, the process of applying a trained model to data in order to generate a model output such as a score, prediction, or classification. Also see training.

Input layer. The first layer in a neural network, acting as the beginning of a model workflow, responsible for receiving data and passing it to subsequent layers. Also see hidden layer and output layer.

Intelligent process automation (IPA). A collection of technologies, including robotic process automation (RPA) and AI, to help automate certain digital processes. Also see robotic process automation (RPA).

J

Jaccard index. A metric used to measure the similarity between two sets of data. It is defined as the size of the intersection of the two sets divided by the size of the union of the two sets. Jaccard index is also known as the Jaccard similarity coefficient.

Jacobian matrix. The first-order partial derivatives of a multivariable function represented as a matrix, providing critical information for optimization algorithms and sensitivity analysis.

Joins. In AI, methods to combine data from two or more data tables based on a common attribute or key. The most common types of joins include inner join, left join, right join, and full outer join.

K

K-means clustering. An unsupervised learning method used to cluster n observations into k clusters such that each of the n observations belongs to the nearest of the k clusters.

K-nearest neighbors (KNN). A supervised learning method for classification and regression used to estimate the likelihood that a data point is a member of a group, where the model input is defined as the k closest training examples in a data set and the output is either a class assignment (classification) or a property value (regression).

Knowledge distillation. In ML, a technique used to transfer the knowledge of a complex model, usually a deep neural network, to a simpler model with a smaller computational cost.

L

Labeling. In ML, the process of identifying and annotating raw data (images, text, audios, videos) with informative labels. Labels are the target variables that a supervised machine learning model is trying to predict. Also see annotation and pseudo-labeling.

Language model. An AI model which is trained to represent, understand, and generate or predict natural human language.

Large language model (LLM). A type of general-purpose language model pre-trained on massive datasets to learn the patterns of language. This training process often requires significant computational resources and optimization of billions of parameters. Once trained, LLMs can be used to perform a variety of tasks, such as generating text, translating languages, and answering questions.

Layer. In ML, a collection of neurons within a neural network which perform a specific computational function, such as an activation function, on a set of input features. Also see hidden layerinput layer, and output layer.

Logistic regression. A type of classifier that measures the relationship between one variable and one or more variables using a logistic function.

Long short-term memory (LSTM). A recurrent neural network (RNN) that maintains history in an internal memory state, utilizing feedback connections (as opposed to standard feedforward connections) to analyze and learn from entire sequences of data, not only individual data points.

Loss function. A function that measures model performance on a given task, comparing a model’s predictions to the ground truth. The loss function is typically minimized during the training process, meaning that the goal is to find the values for the model’s parameters that produce accurate predictions as represented by the lowest possible value for the loss function.

M

Machine learning (ML). A subset of artificial intelligence that gives machines the ability to analyze a set of data, draw conclusions about the data, and then make predictions when presented with new data without being explicitly programmed to do so.

Metadata. Information that describes or explains source data. Metadata can be used to organize, search, and manage data. Common examples include data type, format, description, name, source, size, or other automatically generated or manually entered labels. Also see annotation, labeling, and pseudo-labeling.

Meta-learning. A subfield of machine learning focused on models and methods designed to learn how to learn.

Mimi. The term used to refer to Entefy’s multimodal AI engine and technology.

MLOps. A set of practices to help streamline the process of managing, monitoring, deploying, and maintaining machine learning models.

Model training. The process of providing a dataset to a machine learning model for the purpose of improving the precision or effectiveness of the model. Also see supervised learning and unsupervised learning.

Multi-head attention. A process whereby a neural network runs multiple attention mechanisms in parallel to capture different aspects of input data.

Multimodal AI. Machine learning models that analyze and relate data processed using multiple modes or formats of learning.

Multimodal sentiment analysis. A type of sentiment analysis that considers multiple modalities, such as text, audio, and video, to predict the sentiment of a piece of content. This is in contrast to traditional sentiment analysis which only considers text data. Also see visual sentiment analysis.

N

N-gram. A token, often a string, containing a contiguous sequence of n words from a given data sample.

N-gram model. In NLP, a model that counts the frequency of all contiguous sequences of [1, n] tokens. Also see tokenization.

Naïve Bayes. A probabilistic classifier based on applying Bayes Rule which makes simplistic (naive) assumptions about the independence of features.

Named entity recognition (NER). An NLP model that locates and classifies elements in text into pre-defined categories.

Natural language processing (NLP). A field of computer science and artificial intelligence focused on processing and analyzing natural human language or text data.

Natural language generation (NLG). A subfield of NLP focused on generating human language text.

Natural language understanding (NLU). A specialty area within NLP focused on advanced analysis of text to extract meaning and context. 

Neural network (NN) (also, artificial neural network). A specific machine learning technique that is inspired by the neural connections of the human brain. The intelligence comes from the ability to analyze countless data inputs to discover context and meaning.

Neurosymbolic AI. A type of artificial intelligence that combines the strengths of both neural and symbolic approaches to AI to create more powerful and versatile AI systems. Neurosymbolic AI systems are typically designed to work in two stages. In the first stage, a neural network is used to learn from data and extract features from the data. In the second stage, a symbolic AI system is used to reason about the features and make decisions.

O

Obfuscation. A technique that involves intentional obscuring of code or data to prevent reverse engineering, tampering, or violation of intellectual property. Also see privacy-preserving machine learning (PPML).

One-shot learning. A machine learning technique that allows a model to perform a task after seeing only one example of that task. Also see few-shot learning and zero-shot learning.

Ontology. A data model that represents relationships between concepts, events, entities, or other categories. In the AI context, ontologies are often used by AI systems to analyze, share, or reuse knowledge.

Outlier detection. The process of detecting a datapoint that is unusually distant from the average expected norms within a dataset. Also see anomaly detection.

Output layer. The last layer in a neural network, acting as the end of a model workflow, responsible for delivering the final result or answer such as a score, class label, or prediction. Also see hidden layer and input layer.

Overfitting. In ML, a condition where a trained model over-conforms to training data and does not perform well on new, unseen data. Also see underfitting.

P

Parameter. In ML, parameters are the internal variables the model learns during the training process. In a neural network, the weights and biases are parameters. Once the model is trained, the parameters are fixed, and the model can then be used to make predictions on new data by using the parameters to compute the output of the model. The number of parameters in a machine learning model can vary depending on the type of model and the complexity of the problem being solved. For example, a simple linear regression model may only have a few parameters, while a complex deep learning model may have billions of parameters.

Parameter-Efficient Tuning Methods (PETM). Techniques used to improve the performance of a machine learning model by optimizing the hyperparameters (e.g. reducing the number of parameters required). PETM reduces computational cost, improves generalization, and improves interpretability.

Perceptron. One of the simplest artificial neurons in neural networks, acting as a binary classifier based on a linear threshold function.

Perplexity. In AI, a common metric used to evaluate language models, indicating how well the model predicts a given sample.

Precision. In ML, a measure of model accuracy computing the ratio of true positives against all true and false positives in a given class.

Predictive analytics. The process of learning from historical patterns and trends in data to generate predictions, insights, recommendations, or otherwise assess the likelihood of future outcomes. Also see descriptive analytics and prescriptive analytics.

Prescriptive analytics. The process of using data to determine potential actions or strategies based on predicted future outcomes. Also see descriptive analytics and predictive analytics.

Primary feature. A feature, the value of which is present in or derived from a dataset directly. 

Privacy-preserving machine learning (PPML). A collection of techniques that allow machine learning models to be trained and used without revealing the sensitive, private data that they were trained on. Also see obfuscation.

Prompt. A piece of text, code, or other input that is used to instruct or guide an AI model to perform a specific task, such as writing text, translating languages, generating creative content, or answering questions in informative ways. Also see large language model (LLM)generative AI, and foundation model.

Prompt design. The specialized practice of crafting optimal prompts to efficiently elicit the desired response from language models, especially LLMs.  Prompt design and prompt engineering are two closely related concepts in natural language processing (NLP).

Prompt engineering. The broader process of developing and evaluating prompts that elicit the desired response from language models, especially LLMs. Prompt design and prompt engineering are two closely related concepts in natural language processing (NLP).

Prompt tuning. An efficient technique to improve the output of a pre-trained foundation model or large language model by programmatically adjusting the prompts to perform specific tasks, without the need to retrain the model or update its parameters.

Pseudo-labeling. A semi-supervised learning technique that uses model-generated labeled data to improve the performance of a machine learning model. It works by training a model on a small set of labeled data, and then using the trained model to predict labels for the unlabeled data. The predicted labels are then used to train the model again, and this process is repeated until the model converges. Also see annotation and labeling.

Q

Q-learning. A model-free approach to reinforcement learning that enables a model to iteratively learn and improve over time by taking the correct action. It does this by iteratively updating a Q-table (the “Q” stands for quality), which is a map of states and actions to rewards.

R

Random forest. An ensemble machine learning method that blends the output of multiple decision trees in order to produce improved results.

Recall. In ML, a measure of model accuracy computing the ratio of true positives guessed against all actual positives in a given class.

Recurrent neural network (RNN). A class of neural networks that is popularly used to analyze temporal data such as time series, video and speech data.

Regression. In AI, a mathematical technique to estimate the relationship between one variable and one or more other variables. Also see classification.

Regularization. In ML, a technique used to prevent overfitting in models. Regularization works by adding a penalty to the loss function of the model, which discourages the model from learning overly complex patterns, thereby making it more likely to generalize to new data.

Reinforcement learning (RL). A machine learning technique where an agent learns independently the rules of a system via trial-and-error sequences.

Robotic process automation (RPA). Business process automation that uses virtual software robots (not physical) to observe the user’s low-level or monotonous tasks performed using an application’s user interface in order to automate those tasks. Also see intelligent process automation (IPA).

S

Self-supervised learning. Autonomous Supervised Learning, whereby a system identifies and extracts naturally-available signal from unlabeled data through processes of self-selection.

Semi-supervised learning. A machine learning technique that fits between supervised learning (in which data used for training is labeled) and unsupervised learning (in which data used for training is unlabeled).

Sentiment analysis. In NLP, the process of identifying and extracting human opinions and attitudes from text. The same can be applied to images using visual sentiment analysis. Also see multimodal sentiment analysis.

Singularity. In AI, technological singularity is a hypothetical point in time when artificial intelligence surpasses human intelligence, leading to the rapid but uncontrollable increase in technological development.

Software agent (also, agent). A piece of software that can autonomously perform tasks for a user or other software program(s).

Strong AI. The term used to describe artificial general intelligence or a machine’s intelligence functionality that matches human cognitive capabilities across multiple domains. Often characterized by self-improvement mechanisms and generalization rather than specific training to perform in narrow domains. Also see weak AI.

Structured data. Data that has been organized using a predetermined model, often in the form of a table with values and linked relationships. Also see unstructured data.

Supervised learning. A machine learning technique that infers from training performed on labeled data. Also see unsupervised learning.

Support vector machine (SVM). A type of supervised learning model that separates data into one of two classes using various hyperplanes. 

Symbolic AI. A branch of artificial intelligence that focuses on the use of explicit symbols and rules to represent knowledge and perform reasoning. In symbolic AI, also known as Good Old-Fashioned AI (GOFAI), problems are broken down into discrete, logical components, and algorithms are designed to manipulate these symbols to solve problems. Also see neurosymbolic AI.

Synthetic data. Artificially generated data that is designed to resemble real-world data. It can be used to train machine learning models, test software, or protect privacy. Also see data augmentation.

T

Taxonomy. A hierarchal structured list of terms to illustrate the relationship between those terms. Also see ontology. 

Teacher-student model. A type of machine learning model where a teacher model is used to generate labels for a student model. The student model then tries to learn from these labels and improve its performance. This type of model is often used in semi-supervised learning, where a large amount of unlabeled data is available but labeling it is expensive.

Text-to-3D model. A machine learning model that can generate 3D models from text input.

Text-to-image model. A machine learning model that can generate images from text input.

Text-to-task model. A machine learning model that can convert natural language descriptions of tasks into executable instructions, such as automating workflows, generating code, or organizing data.

Text-to-text model. A machine learning model that can generate text output from text input.

Text-to-video model. A machine learning model that can generate videos from text input.

Time series. A set of data structured in spaced units of time.

TinyML. A branch of machine learning that deals with creating models that can run on very limited resources, such as embedded IoT devices.

Tokenization. In ML, a method of separating a piece of text into smaller units called tokens, representing words, characters, or subwords, also known as n-grams.

Training data. The set of data (often labeled) used to train a machine learning model.

Transfer learning. A machine learning technique where the knowledge derived from solving one problem is applied to a different (typically related) problem.

Transformer. In ML, a type of deep learning model for handling sequential data, such as natural language text, without needing to process the data in sequential order.

Tuning. The process of optimizing the hyperparameters of an AI algorithm to improve its precision or effectiveness. Also see algorithm.

Turing test. A test introduced by Alan Turing in his 1950 paper “Computing Machinery and Intelligence,” to determine whether a machine’s ability to think and communicate can match that of a human’s. The Turing test was originally named The Imitation Game.  

U

Underfitting. In ML, a condition where a trained model is too simple to learn the underlying structure of a more complex dataset. Also see overfitting.

Unstructured data. Data that has not been organized with a predetermined order or structure, often making it difficult for computer systems to process and analyze.

Unsupervised learning. A machine learning technique that infers from training performed on unlabeled data. Also see supervised learning.

V

Validation. In ML, the process by which the performance of a trained model is evaluated against a specific testing dataset which contains samples that were not included in the training dataset. Also see training.

Vector (also, feature vector). In ML, a one-dimensional array of numerical values mathematically representing data points, features, or attributes in various algorithms and models.

Vector database. A type of database that stores information as vectors or embeddings for efficient search and retrieval.

Vectorization. The process of transforming data into vectors.

Visual sentiment analysis. Analysis algorithms that typically use a combination of image-extracted features to predict the sentiment of a visual content. Also see multimodal sentiment analysis and sentiment analysis.

W

Weak AI. The term used to describe a narrow AI built and trained for a specific task. Also see strong AI.

Weight. In ML, a learnable parameter in nodes of a neural network, representing the importance value of a given feature, where input data is transformed (through multiplication) and the resulting value is either passed to the next layer or used as the model output.

Word Embedding. In NLP, the vectorization of words and phrases, typically for the purpose of representing language in a low-dimensional space.

X

XAI (explainable AI). A set of tools and techniques that helps people understand and trust the output of machine learning algorithms.

XGBoost (Extreme Gradient Boosting). A popularmachine learninglibrary based on gradient boosting and parallelization to combine the predictions from multiple decision trees. XGBoost can be used for a variety of tasks, including classification, regression, and ranking.

X-risk. In AI, a hypothetical existential threat to humanity posed by highly advanced artificial intelligence such as artificial general intelligence or artificial superintelligence.

Y

YOLO (You Only Look Once). A real-time object detection algorithm that uses a single forward pass in a neural network to detect and localize objects in images.

Z

Zero-shot learning. A machine learning technique that allows a model to perform a task without being explicitly trained on a dataset for that task. Also see few-shot learning and one-shot learning.

ABOUT ENTEFY

Entefy is an advanced AI software and process automation company, serving SME and large enterprise customers across diverse industries including financial services, health care, retail, and manufacturing.

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contact@entefy.com

2 AI winters and 1 hot AI summer

The field of artificial intelligence (AI) has its roots in the mid-20th century. The early development of AI can be traced back to the Dartmouth Conference in 1956, which is considered the birth of AI as a distinct field of research. The conference brought together a group of computer scientists who aimed to explore the potential of creating intelligent machines. Since its birth, AI’s journey has been long, eventful, and fraught with challenges. Despite early optimism about the potential of AI to match or surpass human intelligence in various domains, the field has undergone two AI winters and now, what appears to be, one hot AI summer.

In 1970, the optimism about AI and machine intelligence was so high that in an interview with Life Magazine, Marvin Minsky, one of the two founders of the MIT Computer Science and Artificial Intelligence Laboratory, predicted that within “three to eight years we will have a machine with the general intelligence of an average human being.” Although the timing of Minsky’s prophecy has been off by a long stretch, recent advances in computing systems and machine learning, including foundation models and large language models (LLMs), are creating renewed optimism in AI capabilities.

The first AI winter

AI winters refer to periods of time when public interest, funding, and progress in the field of artificial intelligence significantly decline. These periods are characterized by a loss of confidence in AI technologies’ potential and often follow periods of overhype and unrealistic expectations.

The first AI winter occurred in the 1970s, following the initial excitement that surrounded AI during the 50s and 60s. The progress did not meet the high expectations, and many AI projects failed to deliver on their promises. Funding for AI research decreased, and interest waned as the technology entered its first AI winter, facing challenges such as:

  1. Technical limitations: AI technologies had met significant technical obstacles. AI research had difficulty representing knowledge in ways that could be readily understood by machines and the R&D was exceedingly limited by the computing power available at the time. This in turn restricted the complexity and scale of learning algorithms. In addition, many AI projects were constrained by limited access to data and encountered difficulties in dealing with real-world complexity and unpredictability, making it challenging to develop effective AI systems.
  2. Overhype and unmet expectations: Early excitement and excessive optimism about AI’s potential to achieve “human-level” intelligence had led to unrealistic expectations. When AI projects faced major hurdles and failed in delivery, it led to disillusionment and a loss of confidence in the technology.
  3. Constraints in funding and other resources: As the initial enthusiasm for AI subsided and results were slow to materialize, funding for AI research plunged. Government agencies and private investors became more cautious about investing in AI projects, leading to resource constraints for institutions and researchers alike.
  4. Lack of practical applications: AI technologies had yet to find widespread practical applications. Without tangible benefits to businesses, consumers, or government entities, interest in the field faded.
  5. Criticism from the scientific community: Some members of the scientific community expressed skepticism about the approach and progress of AI research. Critics argued that the foundational principles and techniques of AI were too limited to achieve human-level intelligence, and they were doubtful about the possibility of creating truly intelligent machines.

    For example, “after a 1966 report by the Automatic Language Processing Advisory Committee (ALPAC) of the National Academy of Sciences/National Research Council, which saw little merit in pursuing [machine translation], public-sector support for practical MT in the United States evaporated…” The report indicated that since fully automatic high-quality machine translation was impossible, the technology could never replace human translators. They said that funds would therefore be better spent on basic linguistic research and machine aids for translators.”

    Another example is the Lighthill report, published in 1973, which was a critique of AI research in the UK. It criticized AI’s failure to achieve its ambitious goals and concluded that AI offered no unique solution that is not achievable in other scientific disciplines. The report highlighted the “combinatorial explosion” problem, suggesting that many AI algorithms were only suitable for solving simplified problems. As a result, AI research in the UK faced a significant setback, with reduced funding and dismantled projects.

Despite the multiple challenges facing AI at the time, the first AI winter lasted for less than a decade (est. 1974-1980). The end of the first AI winter was marked by a resurgence of interest and progress in the field. Several factors contributed to this revival in the early 1980s. These included new advancements in machine learning and neural networks, expert systems that utilized large knowledge bases and rules to solve specific problems, increased computing power, focused research areas, commercialization of and successes in practical AI applications, funding by the Defense Advanced Research Projects Agency (DARPA), and growth in data. The combined impact of these factors led to a reinvigorated interest in AI, signaling the end of the first AI winter. For a few years, AI research continued to progress and new opportunities for AI applications emerged across various industries. When this revival period ended in the late 1980s, the second AI winter set in.

The second AI winter

It is generally understood that the second AI winter started in 1987 and ended in the early 1990s. Similar to the first period of stagnation and decline in AI interest and activity in the mid 70s, the second AI winter was caused by hype cycles and outsized expectations that AI research could not meet. Once again, government agencies and the private sector became cautious about technical limitations, doubts in ROI (Return on Investment), and criticism from the scientific community. At the time, the expert systems proved to be brittle, rigid, and difficult to maintain. Scaling AI systems proved challenging as well since they needed to be able to learn from large data sets which was computationally expensive. This made it difficult to deploy AI systems in real-world applications.

Symbolic AI’s reliance on explicit, rule-based representations was criticized for being inflexible and unable to handle the complexity and ambiguity of everyday data and knowledge. Symbolic AI, also known as Good Old-Fashioned AI (GOFAI), is an approach to AI that focuses on the use of explicit symbols and rules to represent knowledge and perform reasoning. In symbolic AI, problems are broken down into discrete, logical components, and algorithms are designed to manipulate these symbols to solve problems. The fundamental idea behind symbolic AI is to create systems that can mimic human-like cognitive processes, such as logical reasoning, problem-solving, and decision-making. These systems use symbolic representations to capture knowledge about the world and apply rules for manipulating that knowledge to arrive at conclusions or make predictions.

While symbolic AI was a dominant approach in the early days of AI research, it faced certain limitations, such as difficulties in handling uncertainty, scalability issues, and challenges in learning from data. These limitations, along with the emergence of alternative AI paradigms, such as machine learning and neural networks, contributed to the rise of other AI approaches and the decline of symbolic AI in some areas. That said, symbolic AI continues to be used in specific applications and as part of hybrid AI systems that combine various techniques to address complex problems.

During the second AI winter, the AI fervor was not only waning in the United States, but globally as well. In 1992, the government of Japan “formally closed the books on its vaunted ‘Fifth Generation’ computer project.” The decade-long research initiative was aimed at developing “a new world of computers that could solve problems with human-style reasoning.” After spending $400+ million, most of the ambitious goals did not materialize and the effort ended with little impact on the computer market.

The second AI winter was a setback for the field of AI, but it also led to some important progress. AI researchers learned from their past experiments, and they developed new approaches to improve output and performance. These new approaches, such as deep learning, have led to a resurgence of interest in AI research ever since.

While the second AI winter was beginning to thaw in the early 1990s, other technical, political, and societal transformations were taking hold in parallel. The Cold War had come to an end with the collapse of the Soviet Union in December 1991 and, from the ashes, 15 newly independent nations rose. In the same year, Tim Berners-Lee introduced the World Wide Web—the Internet we know today. And in 1992, the Mosaic browser (later Netscape) was born. Users could “see words and pictures on the same page for the first time and to navigate using scrollbars and clickable links.” In the same decade, Linux, today’s most commonly known and used open source operating system, was launched. The first SMS text message was sent. Amazon.com was founded, disrupting the retail industry starting with books. Palm’s PDA (Personal Digital Assistant) devices gave us a glimpse of what’s to come in mobile computing. Google introduced its now dominant web search engine. And, yes, blogs became a thing, opening up opportunities for people to publish anything online.

As a result of all these changes, the world became more connected than ever, and data grew exponentially larger and richer. In the ensuing decade, the data explosion, key advancements to computing hardware, and breakthroughs in machine learning research would all prove to be perfect enablers of the next generation of AI. The AI spring which followed the second AI winter indicated renewed optimism for intelligent machines that can help radically improve our lives and solve major challenges.  

Today’s hot AI summer

Fast forward to present where the application of AI is more than just a thought exercise. The latest upgrades to AI include a set of technologies which are preparing us for artificial general intelligence (AGI). Also known as strong AI, AGI is used to describe a machine’s intelligence functionality that matches human cognitive capabilities across multiple domains and modalities. AGI is often characterized and judged by self-improvement mechanisms and generalizability rather than specific training to perform in narrow domains. Also see Entefy’s multisensory Mimi AI Engine.

In the context of AI, an AI summer characterizes a period of heightened interest and abundant funding directed towards the development and implementation of AI technology. There’s an AI gold rush underway and the early prospectors and settlers are migrating to the field en masse—investors, the world’s largest corporations, entrepreneurs, innovators, researchers, and tech enthusiasts. Despite certain limitations, the prevailing sentiment within the industry suggests that we are currently living through an AI summer, and here are a few reasons why:

  1. The new class of generative AI: Generative AI is a subset of deep learning, using expansive artificial neural networks to “generate” new data based on what it has learned from its training data. Traditional AI systems are designed to extract insights from data, make predictions, or perform other analytical tasks. In contrast, generative AI systems are designed to create new content based on diverse inputs. By applying different learning techniques to massive data sets such as unsupervised, semi-supervised, or self-supervised learning, today’s generative AI systems can produce realistic and compelling new content based on the patterns and distributions the models learn during training. The user input for and the content generated by these models can be in the form of text, images, audio, code, 3D models, or other data.

    Underpinning generative AI are the new foundation models that have the potential to transform not only our digital world but society at large. Foundation models are sophisticated deep learning models trained on massive amounts of data (typically unlabeled), capable of performing a number of diverse tasks. Instead of training a single model for a single task (which would be difficult to scale across countless tasks), a foundation model can be trained on a broad data set once and then used as the “foundation” or basis for training with minimal fine-tuning to create multiple task-specific models. In this way, foundation models can be adapted to a wide variety of use cases.

    Mainstream examples of foundation models include large language models (LLMs). Some of the better-known LLMs include GPT-4, PaLM 2, Claude, and LLaMA. LLMs are trained on massive data sets typically consisting of text and programing code. The term “large” in LLM refers to both the size of the training data and the number of model hyperparameters. As with most foundation models, the training process for an LLM can be computationally intensive and expensive. It can take weeks or months to train a sophisticated LLM on large data sets. However, once an LLM is trained they can solve common language problems. For example, generating essays, poems, code, scripts, musical pieces, emails, and summaries. LLMs can also be used to translate languages or answer questions.
  2. Better computing: In general, AI is computationally intensive, especially during model training. “It took the combination of Yann LeCun’s work in convolutional neural nets, Geoff Hinton’s back-propagation and Stochastic Gradient Descent approach to training, and Andrew Ng’s large-scale use of GPUs to accelerate deep neural networks (DNNs) to ignite the big bang of modern AI — deep learning.” And deep learning models fueling the current AI boom, with millions and billions of parameters, require robust computing power. Lots of it.

    Fortunately, technical advances in chips and cloud computing are all improving the way we can all access and use computing power. The enhancements to the microchips over the years have fueled scientific and business progress in every industry. Computing power has increased “one trillion-fold” from 1956 to 2015. “The computer that navigated the Apollo missions to the moon was about twice as powerful as a Nintendo console. It had 32.768 bits of Random Access Memory (RAM) and 589.824 bits of Read Only Memory (ROM). A modern smartphone has around 100,000 times as much processing power, with about a million times more RAM and seven million times more ROM. Chips enable applications such as virtual reality and on-device artificial intelligence (AI) as well as gains in data transfer such as 5G connectivity, and they’re also behind algorithms such as those used in deep learning.”
  3. Better access to more quality data: The amount of data available to train AI models has grown significantly in recent years. This is due to the growth of the Internet, the proliferation of smart devices and sensors, as well as the development of new data collection techniques. According to IDC, from 2022 to 2026, data created, replicated, and consumed annually is expected to more than double in size. “The Enterprise DataSphere will grow more than twice as fast as the Consumer DataSphere over the next five years, putting even more pressure on enterprise organizations to manage and protect the world’s data while creating opportunities to activate data for business and societal benefits.”
  4. Practical applications across virtually all industries: Over the past decade, AI has been powering a number of applications and services we use every day. From customer service to financial trading, advertising, commerce, drug discovery, patient care, supply chain, and legal assistance, AI and automation have helped us gain efficiency. And that was before the recent introduction of today’s new class of generative AI. The latest generative AI applications can help users take advantage of human-level writing, coding, and designing capabilities. With the newly available tools, marketers can create content like never before; software engineers can document code functionality (in half the time), write new code (in nearly half the time), or refactor code “in nearly two-thirds the time“; artists can enhance or modify their work by incorporating generative elements, opening up new avenues for artistic expression and creativity; those engaged in data science and machine learning can solve critical data issues with synthetic data creation; and general knowledge workers can take advantage of machine writing and analytics to create presentations or reports. 

    These few examples only scratch the surface of practical use cases to boost productivity with AI.
  5. Broad public interest and adoption: In business and technology, AI has been making headlines across the board, and for good reason. Significant increases to model performance, availability, and applicability, have brought AI to the forefront of public dialogue. And this renewed interest is not purely academic. New generative AI models and services are setting user adoption records. For example, ChatGPT reached its first 1 million registered users within the first 5 days of release, growing to an estimated 100 million users after only 2 months, at the time making it the fastest-growing user base of any software application in history. For context, the previous adoption king, TikTok took approximately 9 months to reach the same 100 million user milestone, and it took 30 months for Instagram to do the same.

    In the coming years, commercial adoption of AI technology is expected to grow with “significant impact across all industry sectors.” This will allow businesses additional opportunities to increase operational efficiency and boost productivity that is “likely to materialize when the technology is applied across knowledge workers’ activities.” Early reports suggest that the total economic impact of AI on the global economy could range between $17.1 trillion to $25.6 trillion.

Conclusion

The history of AI has been marked by cycles of enthusiasm and challenges, with periods of remarkable progress followed by setbacks, namely two AI winters. The current AI summer stands out as a transformative phase, fueled by breakthroughs in deep learning, better access to data, powerful computing, significant new investment in the space, and widespread public interest.

AI applications have expanded across industries, revolutionizing sectors such as healthcare, finance, transportation, retail, and manufacturing. The responsible development and deployment of new AI technologies, guided by transparent and ethical principles, are vital to ensure that the potential benefits of AI are captured in a manner that mitigates risks. The resurgence of AI in recent years is a testament to the resilience of the field. The new capabilities are getting us closer to realizing the potential of intelligent machines, ushering in a new wave of productivity.

For more about AI and the future of machine intelligence, be sure to read Entefy’s important AI terms for professionals and tech enthusiasts, the 18 valuable skills needed to ensure success in enterprise AI initiatives, and the Holy Grail of AI, artificial general intelligence.

ABOUT ENTEFY

Entefy is an advanced AI software and process automation company, serving SME and large enterprise customers across diverse industries including financial services, health care, retail, and manufacturing.

www.entefy.com
contact@entefy.com

Entefy co-founders speak on the fast rise of multisensory AI and automation

Entefy sibling co-founders, Alston Ghafourifar and Brienne Ghafourifar, spoke with Yvette Walker, Executive Producer and Host of ABC News & Talk – Southern California Business Report, on the rise of the fast evolving domain of multisensory AI and intelligent process automation. The 1-hour segment included focused discussion on AI applications that help optimize business operations across a number of industries and use cases, including those relevant to supply chains, healthcare, and financial services. Watch the full interview.

In an in-depth conversation about business operational efficiency and optimization across virtually every corner of an organization, the Ghafourifars shared their views on the importance of digital transformation and the intelligence enterprise in volatile times like these. Alston mentioned that AI and machine learning is all about “augmenting human power, allowing machines to do jobs that were traditionally reserved for individuals. And many of those jobs aren’t things that humans should spend their time doing or they’re not things we’re perfectly suited to doing.”

For example, organizations grappling with supply chain challenges are benefitting from machine intelligence and automation. This includes AI-powered applications dealing with everything from sourcing to manufacturing, costing, logistics, and inventory management. “Research shows that many people are now interested in how things are made…all the way from raw materials to how they end up on the shelf or how they’re delivered,” Brienne said. This is ultimately impacting consumer behavior and purchase decisions for many.

This episode also included discussions on blockchain and cryptocurrencies. In particular how AI-powered smart contracts and forecasting models can help reduce risks and increase potential return on investment (ROI).   

When it comes to AI, every organization is at a different point in their journey and readiness. Entefy’s technology platform, in particular, its multisensory AI capabilities, are designed to address digital complexity and information overload. To make this a reality, Entefy and its business customers are envisioning new ways to improve business processes, knowledge management system, as well as workflow and process automation.

For more about AI and the future of machine intelligence, be sure to read our previous blogs on the 18 valuable skills needed to ensure success in enterprise AI initiatives.

ABOUT ENTEFY

Entefy is an advanced AI software and process automation company, serving SME and large enterprise customers across diverse industries including financial services, health care, retail, and manufacturing.

www.entefy.com
contact@entefy.com