Most organizations that are just starting out in AI believe that the key to success lies in advanced algorithms or Big Data. Our consulting experience shows that this philosophy is flawed: sophisticated technology is never a free pass for business success. As AI technology becomes more widely available, the real leaders of the upcoming AI wave won’t be Data Scien- tists or researchers. Instead, the keys for long-term impact are in the hands of the enlightened group who understands business and at the same time speaks enough technology to develop a consistent and achievable AI vision for their organization. Domain AI expertise knowledge The protagonists of the next chapter of the AI era Zero to AI A , - NONTECHNICAL HYPE FREE GUIDE AI TO PROSPERING IN THE ERA GIANLUCA MAURO AND NICOLÒ VALIGI MANNING SHELTER ISLAND For online information and ordering of this and other Manning books, please visit www.manning.com. The publisher offers discounts on this book when ordered in quantity. 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Development editor: Lesley Trites 20 Baldwin Road Technical development editor: Danny Vinson PO Box 761 Review editor: Ivan Martinovic´ Shelter Island, NY 11964 Production editor: Deirdre Hiam Copy editor: Sharon Wilkey Proofreader: Melody Dolab Technical proofreader: Andrew Harmor Typesetter: Gordan Salinovic Cover designer: Marija Tudor ISBN 9781617296062 Printed in the United States of America 1 2 3 4 5 6 7 8 9 10 – SP – 24 23 22 21 20 19 “The future is already here—it’s just not very evenly distributed.” —William Gibson brief contents 1 ■ An introduction to artificial intelligence 1 P 1 U AI .......................................................11 ART NDERSTANDING 2 ■ Artificial intelligence for core business data 13 3 ■ AI for sales and marketing 36 4 ■ AI for media 68 5 ■ AI for natural language 91 6 ■ AI for content curation and community building 119 P 2 B AI...............................................................137 ART UILDING 7 ■ Ready—finding AI opportunities 139 8 ■ Set—preparing data, technology, and people 167 9 ■ Go—AI implementation strategy 185 10 ■ What lies ahead 210 v contents preface vii acknowledgments xv about this book xvii about the authors xxi 1 An introduction to artificial intelligence 1 1.1 The path to modern AI 2 1.2 The engine of the AI revolution: machine learning 4 1.3 What is artificial intelligence, after all? 6 1.4 Our teaching method 8 P 1 U AI..............................................11 ART NDERSTANDING 2 Artificial intelligence for core business data 13 2.1 Unleashing AI on core business data 14 2.2 Using AI with core business data 15 The real estate marketplace example 16 ■ Adding AI capabilities to FutureHouse 18 ■ The machine learning advantage 22 Applying AI to general core business data 24 vii viii CONTENTS 2.3 Case studies 25 How Google used AI to cut its energy bill 25 ■ How Square used AI to lend billions to small businesses 29 ■ Case studies lessons 32 2.4 Evaluating performance and risk 33 3 AI for sales and marketing 36 3.1 Why AI for sales and marketing 37 3.2 Predicting churning customers 38 3.3 Using AI to boost conversion rates and upselling 42 3.4 Performing automated customer segmentation 44 Unsupervised learning (or clustering) 45 ■ Unsupervised learning for customer segmentation 49 3.5 Measuring performance 52 Classification algorithms 52 ■ Clustering algorithms 55 3.6 Tying ML metrics to business outcomes and risks 56 3.7 Case studies 58 AI to refine targeting and positioning: Opower 58 ■ AI to anticipate customer needs: Target 64 4 AI for media 68 4.1 Improving products with computer vision 69 4.2 Using AI for image classification: deep learning? 73 4.3 Using transfer learning with small datasets 76 4.4 Face recognition: teaching computers to recognize people 78 4.5 Using content generation and style transfer 81 4.6 What to watch out for 83 4.7 AI for audio 84 4.8 Case study: optimizing agriculture with deep learning 85 Case questions 88 ■ Case discussion 88 5 AI for natural language 91 5.1 The allure of natural language understanding 92 5.2 Breaking down NLP: measuring complexity 93