Legal Definitions - artificial intelligence (AI)

Artificial intelligence (AI) refers to computer systems designed to perform tasks that traditionally require human intelligence. These systems use algorithms and data to learn, reason, perceive, understand language, and make decisions or predictions. AI can adapt to new information, solve complex problems, and operate in various situations without constant human supervision, often mimicking human cognitive abilities such as learning from experience and improving performance over time.

Here are some examples of artificial intelligence in action:

• Personalized Streaming Recommendations: When you use a video streaming service, the platform suggests movies and TV shows you might enjoy. The AI system analyzes your viewing history, the genres you prefer, how long you watch certain content, and even the ratings you give. By comparing this data with patterns from millions of other users, the AI learns your preferences and predicts new content that is likely to appeal to you, performing a complex task of personalized content curation that would be impossible for a human to manage at scale.

• Smart Thermostats: A smart thermostat in your home learns your daily schedule and temperature preferences over time. Using sensors and data about your presence and past adjustments, the AI-powered device automatically adjusts the heating or cooling to optimize energy use and maintain comfort. It "learns from experience" by observing your habits and "improves performance" by creating an efficient and comfortable environment without constant manual input, adapting to varying conditions like seasonal changes or your family's routine.

• Fraud Detection in Banking: Banks employ AI systems to monitor credit card transactions for suspicious activity. The AI continuously processes vast amounts of transaction data, learning typical spending patterns for individual accounts and across the entire customer base. If it detects a transaction that significantly deviates from these learned patterns—for instance, a large purchase made in a foreign country when the cardholder has never traveled there—it "predicts" potential fraud and flags the transaction for review or alerts the customer. This demonstrates AI's ability to perform rapid, complex analytical tasks and make predictions based on data to protect against financial crime.