Artificial Intelligence in Business

2nd Lecture
Prof. Dr. Abdelaty L. M. Mansi
Course: Computer applications in business
Business school, Suez University
chapter 1: an
overview of artificial
intelligence for
business.

• Chapter 1 topics:
• AI origin and development;
• Big Data supporting AI;
• technology landscape of AI in
business;
• different business
perspectives on AI;
• and a case on CB Insights.
1.1 Introduction
• Artifcial intelligence (AI) is a feld of science dedicated to solving problems commonly associated
with human intelligence, such as learning, problem-solving, and pattern recognition.
• AI technologies are being developed to make machines intelligent, and the intelligence enables
an entity to function appropriately and with foresight in its environment (Ertel, 2018).
• These features of AI perfectly match our needs in business.
• Since the emergence of AI, there has been no unified concept of its potential impact on business.
• AI is a comprehensive subject developed by the interpenetration of computer science,
information theory, cybernetics, linguistics, neurophysiology, psychology, mathematics,
philosophy, and other disciplines (Boullart, 1992).
• AI has gone through ups and downs since it appeared, but it has finally been recognized by the
business world as a new frontier discipline and has increasingly aroused people’s interest and
attention.
foundation for technological advancement in
the business world
• Over the past decade, society has seen technology evolve from handheld smart devices to self-driving
cars, all the way to face recognition technology.
• This is all possible because of artificial intelligence that has established a foundation for technological
advancement in the business world.
• Artificial intelligence has significantly promoted various business sectors because of its ability to help
forecast market trends and satisfy customer needs using data and machine learning.
• we will start with AI’s origin and its commercialization process in the industry.
• Then we introduce how big data has been fueling the fast development of AI.
• We will look at the current technology landscape of AI, machine learning, and big data.
• Business applications will be further explored to highlight the interconnections between AI and
business.
1.2 AI Origin and
Commercialization
• The origin of artificial intelligence began in scientific research, without much relevance
with business practice.
• Alan Turing In 1950, came up with the Turing test, if a machine could communicate with a
human interrogator without being identified as a machine, it would be considered
intelligent.
• The 1950s was also the time in which “artificial intelligence” truly started becoming
common terminology.
AI Origin and Commercialization
cont.
• 1950s Frank Rosenblatt : principles of neurodynamic and artificial neural networks.
• 1960s, the Naive Bayesian classifier was developed.
• machine learning
• support vector machines (1963)
• deep learning (1965)
• the decision tree algorithm (1979).
• Then shshshshshsh
• in the 1980s commercialization of AI started.
• Carnegie Mellon University designed a set of “expert systems” used the artificial intelligence program named XCON.
• This computer system can only be understood as the combination of “knowledge base + reasoning machine.”
• Based on this system, Symbolics, Lisp Machines, Intell iCorp, Aion, and other hardware and software companies were derived.
• in 1986, Anomaly detection was introduced which helped detect the outliers in datasets.
• in 1995, anomaly detection, genetic algorithms were introduced, based on Darwin’s theory of natural selection.
• All these artificial intelligence techniques have been applied to different areas in business.
AI Origin and Commercialization
cont.
• during the 1990s, The rapid growth of computer hardware and software as well as the extensive adoption of network and
telecommunication technologies were boosters for the development of artificial intelligence.
• In 1997, IBM’s Deep Blue became the first computer that defeated the world chess champion.
• Suddenly, AI and machine learning became one of the hottest felds in science and technology.
• 2000s, artificial intelligence really took off and rapidly applied in the world of business.
• 2004, More sophisticated algorithms such as reinforcement learning (also an area of machine learning) were introduced.
• There have been large strides taken in the scientific community in research and development in order to apply the
technology to as many areas as possible.
• 2015, “AI is changing the way we do business. A Japanese venture capital firm recently became the first company in history to
nominate an AI board member for its ability to predict market trends faster than humans”
• In recent years, there are numerous AI applications developed to streamline productivity and efficiency in the business workplace
and daily life.
• The overall technology around artificial intelligence has changed the world of business for the better.
1.3 Big Data Fueling Artificial Intelligence

• Big data refers to how the amount of data that is collected and analyzed has grown tremendously over the recent years.
• the ability to collect data and the number of people and items generating data has grown massively, companies are increasingly turning toward
using the massive amounts of data generated to improve efficiency, tailor marketing strategies, and improve overall performance.
• Big data analytics can be applied to nearly any topic that lies within the business realm, which makes it much more important when looking at
every single factor that goes into running a successful business.
• Big data, cloud computing, and the internet of things set the momentum for artificial intelligence to grow at high speed.
• It is much easier now for businesses to acquire and store huge amounts of data to train machine learning systems.
• Internet of things and handheld electronic devices create numerous data points to be collected, while cloud computing provides huge storage
capacity for companies at relatively low cost.
• Digital transformation of business processes made it possible for companies to accumulate more data and make better decisions.
• Machine learning-powered algorithms are used for business to adapt to unstructured data, including natural language processing, pattern
recognition, computer vision, etc.
• The vast amount of data has also improved the effectiveness of the machine learning algorithms used to make decisions, as more accurate
conclusions can be drawn from the larger data pools.
• Big data helps businesses improve their efficiency in improving decision-making, personalizing promotions, improving timeliness, and more.
 1.4
Technology
Landscape
of AI in
Business
examples
• if a bank is using Al technologies, they are most likely going to be using the AI
algorithms to predict the outcome on how to move forward in making investment
decisions.
• Credit and mortgage companies use big data to evaluate who they are going to lend
their money to and how credible they are to repay that loan amount.
• Machine learning algorithms examine large amounts of data, such as purchase history
and spending records, to detect any activity that may cause harm to the company.
• Apple Siri, Amazon’s echo dot, and Google’s translation system are all based on AI
technologies.
• a hospital; it helps the doctor be able to make the right diagnosis faster than they
could have with the help of AI.
• In manufacturing, it helps with eliminating time inputs while also limiting the amount of
trial and error.
• If companies do not advance with using artificial intelligence, they would most likely be
left behind in the competitive business environment.
1.5 Business
Perspectives on
Artificial Intelligence

• users, managers, investors,

developers, and legislators.
• Cost, time, and effort reduction
• Quality and productivity increases.
CBinsights
• one of the major technology and innovation consulting companies that develop AI applications in
marketing research.
• industry analytics, patent analytics, market sizing, market map makers, etc.
• CB insights uses machine learning, data mining, and algorithms to make strategic decisions about the
market.
• They collect data concerning market size and related markets to give other businesses an idea of
which markets are growing, which ones are going down, and in which markets people are
spending their money.
• This helps businesses get a better understanding of the potential opportunities for market
expansion.
• This also lets them know in which markets they should be investing more of their time and money.
• They collect data about investments, which helps them understand which markets look promising.
• Finally, they collect data about emerging markets, financial trends, and emerging AI startups so
they can see which businesses could potentially start partnerships.
Mosaic algorithms
• would aggregate and synthesize information from disparate sources and programmatically assess the health and likelihood of future success of emerging high-tech
startups.
• The Mosaic algorithms evaluate the companies using the 4 Ms:
• 1. Momentum – how much traction does the company have?
• 2. Market – how healthy is the industry the company is in?
• 3. Money – what is the fnancial health of the company?
• 4. Management – who are the leaders of the company?
• The outputs of Mosaic algorithms include both positive and negative criteria in a specific timeline (CB insights, 2020).
• Positive outputs include:
• • Successful IPO
• • Acquisition with valuation that is greater than last private valuation
• • A $1B+ private market valuation (unicorn status)
• Negative outcomes include:
• • Bankruptcy/death
• • Asset sale
• • Acquisition (talent)
• By examining the outputs of the Mosaic model and algorithms, CBinsights can assess if a high-tech startup is on the right track rising to unicorn glory or descending
into the pit of startup failure.