It is no secret that artificial intelligence (also known as AI) is a hot topic these days — and it’s here to stay. While it may be tempting to think of AI as futuristic robots taking over our lives, you are already using AI in your everyday life in small and significant ways, even if you don’t yet realize it. For example, if your email service has started offering predictive text as you type, that’s AI at work. And if AI is helping you tackle the mundane task of drafting your emails, what other ways might it be able to benefit you and your business?
When it comes to your accounting department, it may already be doing more than you think. Most businesses, no matter how large or small, have their accounting software tied into their bank feed. Artificial intelligence is what manipulates the data between the two interfaces to turn it into a form that your accounting software, such as QuickBooks, can recognize, and once the data is in that software, artificial intelligence is what auto-tags things as “office supplies” versus “fuel” versus “utilities” and so on, helping to categorize for line-item budgets.
At its core, AI allows you and your team to focus your energy on higher-level activities. AI tackles the mundane, repetitive tasks so that you can spend your time elsewhere to better your business. Embracing artificial intelligence can lead to increased efficiency, improved accuracy, and more time and energy to spend on the high-level decision-making necessary to run the best business that you can.
The Four Types of Artificial Intelligence
The term artificial intelligence encompasses more than just predictive text and data entry manipulation. Currently, AI is classified into four main types:
Reactive AI – This type of AI is the most prevalent in today’s technology but is also the most limited. Reactive AI has no ability to reference historical context to inform itself on its outputs, has no memory, and can only work on a perfect dataset. While it’s extremely limited in its capabilities, there are many uses for reactive AI. Common examples include:
- Macros in office productivity software
- Automation rules in accounting software
- What-if scenarios and formulae
- Ability to use import templates to import large datasets at one time
Limited Memory AI – This is the most advanced AI currently available. It can do more complex tasks because it can use historical data to predict future outcomes. It is still limited in that if outliers or challenges occur, the AI won’t be able to produce a desired outcome; the slightest change to the AI’s environment would cause the entire model to fail. Common examples include:
- Self-driving cars
- Chatbots
- Virtual assistants
- Natural language processing
Theory of Mind AI – This is also known as Emotion AI and is currently under development. It aims to be able to understand and analyze human emotional states, but it’s not particularly close to being developed at any level yet.
Self-Aware AI – This would be AI that is aware of not only the state of others, but also of itself. Those sentient robots we all imagine would be this type of AI, but the technology is so far off into the future that we do not even know for sure yet if it’s actually possible to create AI with these abilities.
These four types of AI help break down how much technology this sphere of AI encompasses, but for the rest of this article, we’ll be focusing on the first two types — Reactive AI and Limited Memory AI — and how they can help your business run more efficiently.