What is Artificial Intelligence? Learn About the Two Categories of AI.

In this video Alex Lu, CEO of Kavout, talks about the phenomenon of Artificial Intelligence (AI) and how he delineates AI into two sub-categories. In his opinion, Artificial Intelligence (AI) can be grouped in Cognitive Intelligence (CI) Solutions and Decision Intelligence (DI) Solutions. Simply put, CI is a machine programmed to behave like humans, while DI focuses on data processing, algorithms and predictive modeling. Examples of CI include speech recognition, such as Alexa or Skype Translator, or visual recognition, such as retail clothing categorization that can identify a color and/or fabric. Examples of DI include Kavout’s Kai Score, which uses over 200 data points to predict investment alpha signals. It is through this type of AI that Mastercard is able to increase the accuracy of real-time approvals of genuine transactions and reduce false declines.

CI Solutions have been widely discussed for their human-like features, however DI Solutions have only come into mainstream attention in recent years. What is of note is that for a very long time, DI Solutions have been undertaking sophisticated tasks such as advanced calculations. Over the past 100 years, major companies have invested in computing and intelligent machines, and almost twenty years ago the Expert System allowed machines to learn rules and empowered decision-making based on said rules.

The recent emergence of DI solutions into the mainstream has significantly affected the capital markets. At the end of the day, whether the trade ideas are generated by a human or a machine does not matter – what matters is whether those ideas ultimately make money.