Broadly, artificial intelligence (AI) is the possession of facts and computational abilities by a machine, such as a computer. As we move into the future, artificial intelligence embeds itself further into our lives as exemplified by the proliferation of game playing, speech recognition, and computer vision in daily life. I Know First Research published an article on Seeking Alpha stating that “artificial intelligence has now become, or will become, a vital tool for any business or individual – including investors in stock markets. The computational power available today, in collaboration with the ability to store colossal amounts of data, allows us to do things that were simply not possible before.”
The article goes on to explore the application of artificial intelligence known as expert systems. Expert systems, such as IBM’s Watson (NYSE:IBM), possess the capability to amass the knowledge of multiple experts in a single field and use that information to perform a task. The ability of one machine possessing the knowledge of multiple experts has already begun to shape the future of business which can be seen by looking at the increased amount of patents filed with regards to artificial intelligence. I Know First Researchers found that “… many companies have been shoring up patents in a bid to benefit from the inevitable growth in AI. IBM (NYSE:IBM) obtained the highest amount of patents related to AI. IBM’s mega-computer – Watson – illustrates the way AI transforms companies, as it entered the healthcare sector in 2013 and helped decrease the error rate in cancer diagnoses by physicians.” Other companies patenting their artificial intelligence ventures include: Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOG) (NASDAQ:GOOGL), and SAP (NYSE:SAP). Companies such as Google (NASDAQ:GOOG) (NASDAQ:GOOGL) have also acquired artificial intelligence startups in addition to filing numerous patents.
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As thousands of tech experts work to ban military use of artificial intelligence, other companies such as IBM are aiming to integrate artificial intelligence into the healthcare sector. IBM (NYSE:IBM) recently purchased 30 billion images from anonymous medical records. They will feed these images to Watson to sift through so that the machine can recognize abnormalities in X-Rays, MRI’s, etc. In order to have enough data for Watson to differentiate between normal and abnormal, it will require billions more pictures, but it is a start. In the social network sector, Twitter’s (NYSE: TWTR) new “Cortex” group is also employing this method, known as “deep learning”. Its AI will sift through information from its 300 million users with the ultimate goal of a more personal user experience and the ability to identify objectionable content. In the transportation sector, companies such as Google and Tesla (NYSE: TSLA) are using artificial intelligence to develop autonomous cars.
Researchers at I Know First defined 2 types of artificial intelligence:
There are two different kinds of AI; rule-based and machine learning. Rule-based AI is when an expert would design a set of rules for the program to operate on and the program would be unable to deviate from these set of rules. By contrast, AI based on machine learning is not bound by any set of rules. The program learns for itself and is able to independently make intelligent decisions. These AI programs operate on a specific computer programs called algorithms.
In the finance sector, I Know First uses machine learning to generate stock market predictions based on its algorithms. This helps investors avoid the emotional bias inherent in humans.
Clearly, artificial intelligence has far reaching potential. Still in the infancy of research, artificial intelligence has already integrated itself into the healthcare, social networking, transportation, and finance sectors. Where the future of artificial intelligence will lead is unknown, but its presence in the future is absolute. This makes now a great time to enter the AI market. As artificial intelligence continues to find new purpose in various fields, investors should consider companies with strong long term plans. As companies use artificial intelligence to revolutionize the way business is conducted, they look like healthy investments for a strong portfolio.