What is AI? Basics and how artificial intelligence works

What is AI? AI systems have the ability to perform human-like thought processes and make decisions based on data analysis and machine learning.

The automation of tasks that could previously only be performed by humans is revolutionizing the world of work and making AI an integral part of various industries. In this article, you will not only learn all about the origins of AI, but also look at the current applications and challenges of this fascinating technology.

It is not only capable of performing complex tasks, but also of holding lively conversations, writing poetry or planning your next vacation.

See for yourself how versatile and helpful the application of AI is.

AI definition

The definition of AI

AI (Artificial Intelligence) stands for "artificial intelligence". It refers to the ability of machines and computers to perform tasks that would normally require human intelligence.

Artificial intelligence is based on algorithms and models that enable computers to learn from experience, recognize patterns, solve problems, make decisions and imitate human-like behaviour. 

The development of AI aims to enable machines to perform complex tasks autonomously and continuously improve without the need for human programming for each specific task. 

Artificial intelligence has a wide range of applications and can be found in fields such as Robotics, speech recognition, Image recognition and processing, machine learning, automated decision making, and much more.

How relevant is AI in today's society?

Take ChatGPT, Bing and Bard, for example. They are representatives of the new generation of AI-powered chatbots. They are not only able to answer complex questions and write poetry, but also to generate code, plan vacations and translate languages.

Their relevance in our society is constantly increasing. While applications with artificial intelligence were previously often used in science, industry and medicine, there are now thousands of apps and programs that are used in everyday life. 

Excursus: History of AI

The beginnings of AI date back to the 1940s and 1950s, with roots in the science fiction literature of the 19th and 20th centuries.

Modern AI was born in 1956, when John McCarthy coined the term "artificial intelligence".

The first AI programs were created in the 1960s and 1970s, followed by a breakthrough in the following decades through machine learning.

The development of deep learning in the 2000s and the use of big data took AI to a new level. Advances such as transfer learning reduced the need for large data sets.

The development of AI has taken mechanical automata through rule-based systems to self-learning machines. The combination of AI with technologies such as the Internet of Things and robotics opens up innovative application possibilities in various areas.

Application areas of AI

AI use cases

Artificial intelligence is used in a wide variety of applications and industries. Here are some examples of the applications of AI:

General applications

  • Texting: AI is increasingly used for the automatic generation of texts. ChatGPT, Bing and Bard are examples where advanced language models are used to create articles, product descriptions, reports and even creative texts such as poems or stories. This technology is used in content creation for businesses, journalism, and other areas where extensive text is needed. However, it is important to critically review AI-generated content, as quality and correctness sometimes need to be improved.
  • Text recognition: OCR text recognition uses AI to convert printed or handwritten text into digital text. It is about digital archiving of documents, about Make PDFs searchable, the automatic capture of data from invoices and forms, the translation of printed text, and accessibility for the visually impaired by converting text to speech. Thanks to constant improvements through AI, the accuracy and efficiency of text recognition is continuously increased, making OCR a valuable tool in digital word processing.
  • Voice assistants: AI-powered voice assistants like Siri, Google Assistant, and Alexa allow users to ask questions, delegate tasks, play music, and more.
  • Image recognition: AI enables the recognition and classification of objects, faces and scenes in images and videos (Computer Vision). Advanced deep learning algorithms can analyze complex visual data to help autonomous vehicles perceive their surroundings and avoid obstacles, for example. 
  • Personalized recommendations: AI is used to create personalized recommendations for products, movies, music, and news based on users' individual preferences and behaviors.
  • Chatbots: NLP technologies enable machines to understand, interpret, and respond to human language. They are used in chatbots, translation applications, and text analytics.

Use Case 1 - Automated invoice processing with Konfuzio in companies


Processing invoices manually is time-consuming, error-prone and can lead to delays. Companies are faced with the challenge of processing large volumes of invoices efficiently and extracting data accurately.

Solution with Konfuzio:

Konfuzio offers an intelligent solution for automated invoice processing. The platform uses advanced OCR technology, machine learning and NLP to understand invoices, extract relevant information and convert it into structured data.


  • Capture: Incoming invoices are scanned or uploaded digitally.
  • Automatic extraction: Konfuzio automatically extracts relevant information such as invoice date, amount, supplier information and more.
  • Validation and categorization: The extracted data is validated and assigned to corresponding categories.
  • Integration with existing systems: The processed data can be seamlessly integrated into accounting systems or ERP systems.


  • Efficiency improvement: Faster processing of large amounts of data compared to manual processing.
  • Reduction of errors: Automated extraction minimizes human error.
  • Time and cost savings: Employees can concentrate on more demanding tasks, while repetitive tasks are automated.
  • Data quality: Machine learning improves the accuracy of data extraction over time.

Use case 2 - AI in medicine


In medicine, the precise diagnosis of diseases often requires a complex analysis of medical images, which can be time-consuming and error-prone.


The use of image recognition algorithms enables faster and more accurate diagnosis.


One application of this approach could be the automated analysis of radiological images to identify anomalies or disease patterns at an early stage.

Use case 3 - AI in the economy


In large companies, customer management and the provision of personalized services is often a challenge.


The implementation of chatbots for customer service and personalized recommendation systems enables more efficient interaction with customers.


One application could be that a company uses AI technologies to conduct automated, customer-oriented chats and generate personalized product suggestions based on customer preferences.

Use case 4 - AI in the industry

Problem: Unplanned machine downtime leads to production interruptions and high maintenance costs.


The use of predictive maintenance through machine learning enables the early detection of potential machine problems and planned maintenance measures.


A company could use AI algorithms to monitor the condition of its production facilities and provide early warning of anomalies in order to minimize downtime.

Use case 5 - AI in education


The individual adaptation of learning materials to the different needs of each pupil is a challenge in education.


Adaptive learning platforms, which adapt to the learning progress of each student, offer a solution.


By using machine learning, schools could create personalized learning plans that meet the learning needs of each student to enable more effective knowledge transfer.

Opportunities and challenges of AI

The rapid development of artificial intelligence opens up a multitude of opportunities while also posing significant challenges. 

Potential benefits of AI

  • Efficiency improvement: AI can automate tasks and streamline processes, resulting in a significant increase in the Workflow efficiency in various industries.
  • Personalization: AI enables personalized services and recommendations by analyzing user behavior and preferences and responding to them individually.
  • Medical progress: AI helps improve the diagnosis and treatment of disease by analyzing medical data and gaining new insights from large data sets.
  • Research and innovation: AI opens up new opportunities for research and innovation in a variety of fields, including the discovery of new materials, medicines, and technologies.

Ethical concerns and risks

  • Ethics and privacy: The use of AI raises ethical questions, particularly regarding privacy, discrimination, and transparent decision making.
  • Job loss: The automation of work processes through AI may lead to job losses and requires an adaptation of the world of work.
  • Explainability: The complexity of AI models often makes it difficult to explain their decisions, which can affect trust and acceptance.
  • Security and abuse: AI can be misused for harmful purposes, such as spreading misinformation or cyberattacks.
  • Dependence on data: AI systems rely heavily on high-quality, big data, which raises concerns about data quality and potential bias.

The use of AI offers promising opportunities, but also poses challenges that require careful attention and responsible solutions in order to use the technology for the benefit of society.

What is AI? A conclusion

AI is heavily integrated into our everyday lives, be it in smart homes, autonomous vehicles, personalized healthcare solutions or automated services. It is also likely that AI will play an increasingly important role in tackling global challenges such as climate change, healthcare and mobility.

At the same time, however, it is important to critically reflect on the ethical and social impact of AI. The discussion about transparency, data protection and responsibility in the use of AI technologies will increase.

Overall, AI - if used with a balanced approach - represents an opportunity to improve our lives sustainably and open up new horizons.

Do you have questions about Artificial Intelligence (AI) and how Konfuzio can optimize your processes? Contact us now and one of our experts will get back to you personally to discuss all your AI concerns and how Konfuzio can help you.

    Janina Horn Avatar

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