What Is Artificial Intelligence (AI)? Overview, Types, and Importance

What Is Artificial Intelligence (AI)?

By Frank Bass – Updated Dec 12, 2025 at 11:16 AM EST

Key Points

AI uses computers to imitate human judgment, affecting many industries subtly.
Invest in AI as it shapes various sectors like robotics in medicine and automated investing.
Stay informed on AI trends; they play a major role in future investment landscapes.

Artificial intelligence uses machines -- generally, computers -- to mimic human intelligence. Although there are debates about its utility, AI has become common in applications that range from the creation of generative chatbots to the selections displayed in your Netflix queue. A wide variety of AI investments have become available as well. As shown in The Motley Fool's 2026 AI Investor Outlook Report, investors remain bullish on AI stocks. Read on to learn more about this rapidly growing field and what it might mean for your investment portfolio.

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A graphic explaining the four types of AI, which are machine learning, neural networks, natural language processing, and robotics. — Image source: The Motley Fool

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Machine Learning

Machine learning is a technique by which artificial intelligence programs are trained.

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Natural Language Processing (NLP)

Natural language processing (NLP) is a branch of AI involving the ability of computers to understand spoken language and text.

3. Natural language processing

Natural language processing is often confused with simple speech recognition. It certainly includes the ability to understand speech, but it involves more than simple audio-to-text (and vice versa) translations. One of the goals of natural language processing is the design of a computer to fully understand and analyze documents.

Microsoft (MSFT +1.13%) has become a major player in the field since investing $13 billion in OpenAI, the startup that created ChatGPT. Its Azure is the sole cloud provider for the generative chatbot and offers sentiment analysis, text classification, and text summarization, among others.

4. Robotics

The use of robots dates back hundreds of years, but machines that could assist people without actual human involvement are considerably newer. One of the first autonomous robots was installed in 1961 and used to lift hot pieces of metal from a machine. Since then, robots have become far more common. They're used in applications ranging from space exploration to vacuuming your carpet.

Robotics has evolved beyond industrial uses and are used in a wide range of applications, including medicine. The da Vinci system created by Intuitive Surgical (ISRG -1.67%), for example, is used for a wide range of procedures, including cardiac valve, prostate, and gynecological surgeries.

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About the Author

Frank Bass is a contributing Motley Fool stock market analyst and editor covering energy, healthcare, consumer, and financial sectors. Frank has decades of experience in financial journalism, holding reporting and editing roles at The Wall Street Journal, The Associated Press, and Bloomberg. He also currently edits research on the global energy transition. He holds a bachelor’s degree in journalism from Texas Tech University and is a graduate student at the University of Alaska Fairbanks. Fun Facts: Frank has hiked The Long Trail in Vermont from end to end, and currently lives in a semi-dry cabin in Interior Alaska.

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Frank Bass has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Intuitive Surgical, Microsoft, and Pinterest. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.