When you think of AI, you might think of ChatGPT, AI-generated art, or maybe something like the Terminator. But let’s take a step back and ask the basic question, “What is AI?”
AI is short for artificial intelligence — which may not tell us much because one of these words is problematic.
The first word, artificial, is not the issue. It simply means something made by humans.
However, the second word, intelligence, is not well defined (even among AI researchers [1]). Nevertheless, a definition I like to use, and one that is most relevant in a business context, is intelligence = the ability to solve problems and make decisions.
Therefore, with this operational definition of intelligence, AI is simply a computer’s ability to solve problems and make decisions.
To get a better idea of what we mean by intelligence, let’s see it in action.
Suppose you are trying to decide whether to spend your Saturday by the pool or inside watching that new Netflix series. If you look out the window and see the scene in the image below, you may decide to stay in. That’s because the dark, cloudy sky is a good indicator that the weather won’t be great today.