AI, as one of the many definitions goes, is the science of putting intelligence into machines so that they can carry out the activities of human beings.
A very public demonstration of the scope of AI took place in 1997. The world chess champion Garry Kasparov took on IBMs Deep Blue supercomputer in a match and lost. Mr Kasparov was quoted in the international media as saying that the computer played like god.
There are some fundamental differences between programming a computer to beat the best among men and typical business decision-making situations, experts say. A chess situation can always be broken down to a mathematical problem. Also, all possible situations can be defined. However, in many cases, business decisions involve the use of cognitive skills. Decisions often have to be taken in the absence of complete information.
Human beings use symbolic processes to solve problems, reason, speak and write, learn and invent. Over the past 45 years, cognitive psychology has built and tested empirical models of these processes as they are used to perform simple tasks and then more complex ones. The models take the form of computer programs that simulate human behaviour, Herbert A Simon, who is considered the father of AI, has said.
Through the use of technology, researchers try and mimic the process of the human brain. This is called a neural network (artificial). A neural network is provided with huge amounts of data. It is also given the various rules. High processing power is also provided to the network. When an input is provided, the network is able to react and provide a feedback. Also, a neural network can initiate commands on its own.
AI systems are also provided with inference engines so that they can become learning systems. They can find out the relationships between various elements and use this feedback in further decision-making exercises.
AI is beginning to make significant inroads into the world of business. Automated trading systems have been able to beat a team of human beings in commodity trading. According to reports, some large international companies have begun using bots (software programs) to find out the best deals on the internet. Also, the bots have the capability to execute purchases over the Net.
Intelligence comes in various forms and in varying degrees. We have come to expect a high level of intelligence from the machines and other systems due to the hype that has surrounded AI. When we see some basic intelligence in machines or other systems, we are no longer able to appreciate it. There are examples that use intelligence to a lesser degree but do not catch our fancy, an expert says.
For example, intelligent machinery which can alter the mix of the inputs based on certain parameters to achieve a particular level of output is increasingly finding application in the process industry, especially relating to chemicals, he explains.
Another technology which helps build intelligence is fuzzy logic. Fuzzy logic helps see things in shades rather than just black or white (zeros or ones). Fuzzy logic has many similarities with the thought process of the brain. Humans also measure issues qualitatively rather than quantitatively. For example, human beings tend to see a person as tall or short rather than speak in terms of the exact height.
Fuzzy logic has begun to find application in the financial world. For example, the risk appetite of many customers cannot be categorised in absolute terms.
It can be estimated or their preferences can be described in terms of low risk, moderate, high risk etc. Based on the risk considerations, suitable investment porfolios can be suggested or executed in an automated trading situation. Automated trading has become a common feature in many development markets.
There are many new applications of AI which are being constantly developed. Like virtual reps who can handle a range of queries in natural language to robots who can mimic human behaviour in diverse ways. While developments like these or the AI displayed by the characters in Star Track seem a far way off, AI is increasingly being incorporated in the business world.