The world of Artificial Intelligence (AI) can be a complex one, filled with various terms that can sometimes confuse investors. AI itself is a broad term encompassing various techniques enabling machines to simulate human intelligence. Within AI, there are different specializations, such as True AI, Generative AI, and Cognitive AI each with its capabilities.
While True AI is envisioned as a machine capable of solving problems it wasn’t specifically designed for, some investors might mistake it for the impressive content creation abilities of generative AI.
Generative AI, like a creative machine artist, can produce new and original content, but within its defined parameters.
Cognitive AI adds another layer, where the machine can learn and potentially uncover new knowledge, but it’s important to remember this “self-teaching” is still within its programmed framework.
Why investors should understand the differences between AI types? Accurately discerning these AI types allows investors to better assess a company’s true potential. Investing in a company developing True AI, with its capability for unforeseen problem-solving, carries a much different risk-reward profile than one focused on generative AI’s content creation. Similarly, cognitive AI’s potential for uncovering new knowledge presents a different set of possibilities compared to either.
Understanding these distinctions is crucial for investors to make informed decisions and avoid mismatched expectations.