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. Read on to learn more about this rapidly growing field and what it might mean for your investment portfolio.
What is artificial intelligence?
Once a staple of science fiction -- think, Frankenstein -- artificial intelligence, or AI, is commonly used by billions of people. Although there’s no set definition, it’s generally agreed that artificial intelligence is the use of computers to mimic human judgment. These days, it’s used by almost every industry, often in ways that are too subtle to be noticed.
Categories of artificial intelligence
There are three basic categories of artificial intelligence:
- Narrow AI: Artificial intelligence can be built for very specific tasks, such as playing a game, keeping spam out of your inbox, helping you find a nearby restaurant with your smartphone, or even driving your car.
- General AI: With more resemblance to human capabilities, general artificial intelligence is a more advanced form that can involve visual and language processing, contextual understanding, and the ability to adapt to a range of tasks. It’s considered to be far off in the future.
- Artificial super AI: Imagine a machine that’s smarter than you -- much smarter. Artificial superintelligence is still only a theory, but advances in nascent AI are raising interesting and troubling questions for the future of humanity.
Types of artificial intelligence
The proliferation of data and other online resources has caused an explosion in the use of artificial intelligence. But not all AI is equal. We'll look at four different types of artificial intelligence to give you an idea of how it's developed and how AI is being used.
Machine Learning
Natural Language Processing (NLP)
Importance of artificial intelligence
Obviously, artificial intelligence has enormous ramifications for almost every human endeavor that you can imagine -- including investing. Imagine a robo-advisor that automatically tracks your portfolio and maximizes its value by making immediate and personalized adjustments based on corporate earnings calls, currency fluctuations, or even weather forecasts.
It’s a tempting vision, but one with downsides. Artificial intelligence costs money, making it (for now) the province of wealthy corporations. Even AI designers can’t anticipate every potential pitfall. And, of course, there’s always the end-of-the-world scenario where AI winds up deciding that humans just aren’t worth the trouble (think “The Matrix” or “Terminator” movies).
Many questions related to AI are just now being asked; they may be decades from being answered. But it’s a good idea to keep track of this megatrend, which stands to affect the world in ways that we likely can’t yet imagine.
