OPINION : Artificial Intelligence: The Machine That Is Rewriting The Rules Of Business

By Akinsola, JET Ph.D.

Artificial intelligence (AI) is the latest disruptive technology, and the most consequential. Here is what it is, what it is already doing, and what we should worry about.

Every era has a technology that makes the old way of doing things look quaint. Electricity did it to candlelight, and television did it to the radio evening. The automobile did it to the horse. Today the technology in question is artificial intelligence, and it is quietly moving into almost every part of working life.

A quick definition

At its core, AI means machines imitating the way humans think and behave. It borrows from philosophy, psychology and linguistics, and it rests on a handful of building blocks: learning from data, understanding human language, perceiving the environment, planning, and controlling robots.

Researchers usually sort AI into four stages. The first is the reactive machine, which responds only to what is in front of it. IBM’s Deep Blue chess computer is the classic example. The second stage is “limited memory”, systems that improve by learning from past data. Most of the AI we use today sits here, including the recommendations on your phone and the fraud alerts from your bank.

The third stage is “theory of mind”, machines that grasp human thoughts and emotions. It is still largely ahead of us, though researchers are inching toward it in driverless cars and digital assistants. The fourth is true self-awareness, which for now belongs to science fiction.

Why “disruptive”?

The word comes from Clayton Christensen, the Harvard Business School professor. A disruptive technology does more than improve on what exists. It replaces an established product or process, and the challenger usually comes from a young company rather than an industry giant.

Examples are everywhere. Netflix took on the video rental shop and cable television, Uber took on the taxi rank, and Airbnb took on the hotel. Behind all of them stands the Internet, the original disruptor, on which most later ones were built.

AI is different in kind. Most disruptors upend one industry, but AI is reshaping nearly all of them at once.

The fuel is data

AI is powerful now because of data. One widely cited estimate said that in 2018, 90 percent of the data generated each year had been created in just the previous two years. Every click, purchase and message adds to the pile. Machine learning turns that raw material into predictions, and prediction is the product that businesses increasingly pay for.

Five faces of business AI

For business, AI comes in several flavours and they are listed thus:

Interactive AI is the chatbot or virtual assistant that answers customers at any hour.

Functional AI goes beyond advising and acts. It can spot a failing machine in a factory network and shut it down, or direct warehouse robots to bring shelves to human pickers.

Analytic AI combs through large datasets to assess supplier risk or gauge customer sentiment.

Text AI converts speech to text, translates languages and finds the right document even when the keywords don’t match.

Visual AI lets an insurer assess vehicle damage from a photograph, or lets a packing house grade apples by size and colour.