What Is Ai v2
What Is Ai v2
What Is Ai v2
What is AI (artificial
intelligence)?
Artificial intelligence is a machine’s ability to perform some
cognitive functions we usually associate with human minds.
April 2024
Humans and machines: a match made in individual could in 31,688,765,000 years. And beyond
productivity heaven. Our species wouldn’t have computation, which machines have long been faster
gotten very far without our mechanized workhorses. at than we have, computers and other devices are
From the wheel that revolutionized agriculture to now acquiring skills and perception that were once
the screw that held together increasingly complex unique to humans and a few other species.
construction projects to the robot-enabled
assembly lines of today, machines have made life AI is a machine’s ability to perform the cognitive
as we know it possible. And yet, despite their functions we associate with human minds, such as
seemingly endless utility, humans have long feared perceiving, reasoning, learning, interacting with the
machines—more specifically, the possibility that environment, problem-solving, and even exercising
machines might someday acquire human intelligence creativity. You’ve probably interacted with AI even if
and strike out on their own. you don’t realize it—voice assistants like Siri and
Alexa are founded on AI technology, as are some
But we tend to view the possibility of sentient customer service chatbots that pop up to help
machines with fascination as well as fear. This you navigate websites.
curiosity has helped turn science fiction into actual
science. Twentieth-century theoreticians, like Applied AI—simply, artificial intelligence applied to
computer scientist and mathematician Alan Turing, real-world problems—has serious implications for
envisioned a future where machines could the business world. By using artificial intelligence,
perform functions faster than humans. The work companies have the potential to make business
of Turing and others soon made this a reality. more efficient and profitable. But ultimately, the
Personal calculators became widely available in the value of AI isn’t in the systems themselves. Rather,
1970s, and by 2016, the US census showed that it’s in how companies use these systems to assist
89 percent of American households had a computer. humans—and their ability to explain to shareholders
Machines—smart machines at that—are now just and the public what these systems do—in a way
an ordinary part of our lives and culture. that builds trust and confidence.
Those smart machines are also getting faster and For more about AI, its history, its future, and how to
more complex. Some computers have now crossed apply it in business, read on.
the exascale threshold, meaning they can perform
as many calculations in a single second as an Learn more about QuantumBlack, AI by McKinsey.
Web 2024
GenAI2
Exhibit
Exhibit 2b 1of 2
Artificial intelligence
The science and
engineering of Machine learning
making intelligent A major
machines breakthrough Deep learning
in achieving AI An advanced
branch of machine Generative AI
learning An advanced branch
of deep learning
AI is the broad field of Machine learning Deep learning uses neural Generative AI is a branch of
developing machines algorithms detect networks, inspired by the deep learning that uses
that can replicate patterns in large ways neurons interact in the exceptionally large neural
human behavior, data sets and learn human brain, to ingest data networks called large
including tasks related to make predictions and process it through language models (with
to perceiving, by processing data, multiple iterations that learn hundreds of billions of neurons)
reasoning, learning, rather than by increasingly complex that can learn especially
and problem-solving. receiving explicit features of the data and abstract patterns. Language
programming make increasingly models applied to interpret and
instructions. sophisticated predictions. create text, video, images, and
data are known as generative AI.
What is generative AI? MIT physicist Rodney Brooks shared details on the
Generative AI (gen AI) is an AI model that generates four previous stages of AI:
content in response to a prompt. It’s clear that
generative AI tools like ChatGPT and DALL-E (a tool — Symbolic AI (1956). Symbolic AI is also known as
for AI-generated art) have the potential to change classical AI, or even GOFAI (good old-fashioned
how a range of jobs are performed. Much is still AI). The key concept here is the use of symbols
unknown about gen AI’s potential, but there are and logical reasoning to solve problems. For
some questions we can answer—like how gen AI example, we know a German shepherd is a dog,
models are built, what kinds of problems they are which is a mammal; all mammals are warm-
best suited to solve, and how they fit into the broader blooded; therefore, a German shepherd should
category of AI and machine learning. be warm-blooded.
For more on generative AI and how it stands to The main problem with symbolic AI is that humans
affect business and society, check out our Explainer still need to manually encode their knowledge
“What is generative AI?” of the world into the symbolic AI system, rather
than allowing it to observe and encode
relationships on its own. As a result, symbolic AI
What is the history of AI? systems struggle with situations involving
real-world complexity. They also lack the ability
The term “artificial intelligence” was coined in 1956
to learn from large amounts of data.
by computer scientist John McCarthy for a workshop
at Dartmouth. But he wasn’t the first to write about
Symbolic AI was the dominant paradigm of AI
the concepts we now describe as AI. Alan Turing
research until the late 1980s.
introduced the concept of the “imitation game” in a
1950 paper. That’s the test of a machine’s ability
— Neural networks (1954, 1969, 1986, 2012).
to exhibit intelligent behavior, now known as the
Neural networks are the technology behind
“Turing test.” He believed researchers should focus
the recent explosive growth of gen AI. Loosely
on areas that don’t require too much sensing and
modeling the ways neurons interact in the
action, things like games and language translation.
human brain, neural networks ingest data and
Research communities dedicated to concepts
process it through multiple iterations that learn
like computer vision, natural language understanding,
increasingly complex features of the data. The
and neural networks are, in many cases, several
neural network can then make determinations
decades old.
Vistra is a large power producer in the Vistra and a McKinsey team, including data Overall, the AI-powered HRO helped Vistra
United States, operating plants in 12 states scientists and machine learning engineers, achieve the following:
with a capacity to power nearly 20 million built a multilayered neural network model.
— approximately 1.6 million metric tons of
homes. Vistra has committed to achieving The model combed through two years’
carbon abated annually
net-zero emissions by 2050. In support worth of data at the plant and learned
of this goal, as well as to improve overall which combination of factors would attain — 67 power generators optimized
efficiency, QuantumBlack, AI by McKinsey the most efficient heat rate at any point
— $60 million saved in about a year
worked with Vistra to build and deploy in time. When the models were accurate to
an AI-powered heat rate optimizer (HRO) 99 percent or higher and run through a
Read more about the Vistra story here.
at one of its plants. rigorous set of real-world tests, the team
converted them into an AI-powered engine
“Heat rate” is a measure of the thermal that generates recommendations every
efficiency of the plant; in other words, it’s 30 minutes for operators to improve the
the amount of fuel required to produce plant’s heat rate efficiency. One seasoned
each unit of electricity. To reach the optimal operations manager at the company’s
heat rate, plant operators continuously plant in Odessa, Texas, said, “There are
monitor and tune hundreds of variables, things that took me 20 years to learn
such as steam temperatures, pressures, about these power plants. This model
oxygen levels, and fan speeds. learned them in an afternoon.”
Web 2024
GenAI2
Exhibit 1 of 2
Exhibit 2
— Individual rights. Make users aware when they — “As gen AI advances, regulators—and risk
are interacting with an AI system, and provide functions—rush to keep pace,” December 21,
clear instructions for use. 2023, Andreas Kremer, Angela Luget, Daniel
Mikkelsen, Henning Soller, Malin Strandell-
Jansson, and Sheila Zingg
How can organizations scale up
their AI efforts from ad hoc projects — “What is generative AI?,” January 19, 2023
to full integration?
— “Tech highlights from 2022—in eight charts,”
Most organizations are dipping a toe into the AI
December 22, 2022
pool—not cannonballing. Slow progress toward
widespread adoption is likely due to cultural
— “Generative AI is here: How tools like ChatGPT
and organizational barriers. But leaders who
could change your business,” December 20, 2022,
effectively break down these barriers will be best
Michael Chui, Roger Roberts, and Lareina Yee
placed to capture the opportunities of the AI era.
And—crucially—companies that can’t take full
— “The state of AI in 2022—and a half decade in
advantage of AI are already being sidelined by those
review,” December 6, 2022, Michael Chui,
that can, in industries like auto manufacturing
Bryce Hall, Helen Mayhew, Alex Singla, and
and financial services.
Alex Sukharevsky
To scale up AI, organizations can make three
— “Why businesses need explainable AI—and how
major shifts:
to deliver it,” September 29, 2022, Liz Grennan,
Andreas Kremer, Alex Singla, and Peter Zipparo
1. Move from siloed work to interdisciplinary
collaboration. AI projects shouldn’t be limited
— “Why digital trust truly matters,” September 12,
to discrete pockets of organizations. Rather,
2022, Jim Boehm, Liz Grennan, Alex Singla, and
AI has the biggest impact when it’s employed
Kate Smaje
by cross-functional teams with a mix of skills
and perspectives, enabling AI to address broad
— “McKinsey Technology Trends Outlook 2023,”
business priorities.
July 20, 2023, Michael Chui, Mena Issler, Roger
Roberts, and Lareina Yee
2. Empower frontline data-based decision making.
AI has the potential to enable faster, better
— “An AI power play: Fueling the next wave of
decisions at all levels of an organization. But for
innovation in the energy sector,” May 12, 2022,
this to work, people at all levels need to trust the
Barry Boswell, Sean Buckley, Ben Elliott, Matias
algorithms’ suggestions and feel empowered to
Melero, and Micah Smith
make decisions. (Equally, people should be able
to override the algorithm or make suggestions
— “Scaling AI like a tech native: The CEO’s role,”
for improvement when necessary.)
October 13, 2021, Jacomo Corbo, David
Harvey, Nicolas Hohn, Kia Javanmardian, and
3. Adopt and bolster an agile mindset. The agile
Nayur Khan
test-and-learn mindset will help reframe
mistakes as sources of discovery, allaying the
fear of failure and speeding up development.
— “An executive’s guide to AI,” November 17, 2020, This article was updated in April 2024; it was
Michael Chui, Brian McCarthy, and originally published in April 2023.
Vishnu Kamalnath