Artificial Intelligence for Business 9780136556619_print.indb 1 21/10/20 4:10 PM This page intentionally left blank Artificial Intelligence for Business What You Need to Know about Machine Learning and Neural Networks Doug Rose Boston • Columbus • New York • San Francisco • Amsterdam • Cape Town Dubai • London • Madrid • Milan • Munich • Paris • Montreal • Toronto • Delhi • Mexico City São Paulo • Sydney • Hong Kong • Seoul • Singapore • Taipei • Tokyo 9780136556619_print.indb 3 21/10/20 4:10 PM Editor-in-Chief: Mark L. Taub Acquisitions Editor: Malobika Chakraborty Development Editor: Chris Zahn Managing Editor: Sandra Schroeder Senior Project Editor: Lori Lyons Production Manager: Aswini Kumar/codeMantra Copy Editor: Gill Editorial Services Indexer: Erika Millen Proofreader: Betty Pessagno Cover Designer: Chuti Prasertsith Compositor: codeMantra Many of the designations used by manufacturers and sellers to distinguish their products are claimed as trademarks. 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ISBN-13: 978-0-13-655661-9 ISBN-10: 0-13-655661-2 ScoutAutomatedPrintCode 9780136556619_print.indb 4 21/10/20 4:10 PM For Jelena and Leo 9780136556619_print.indb 5 21/10/20 4:10 PM This page intentionally left blank Contents at a Glance Foreword .......................................................................................................... xv Preface............................................................................................................. xix PART I Thinking Machines: An Overview of Artificial Intelligence ................................................................................1 Chapter 1 What Is Artificial Intelligence? .........................................................................3 Chapter 2 The Rise of Machine Learning .......................................................................19 Chapter 3 Zeroing in on the Best Approach ....................................................................35 Chapter 4 Common AI Applications ................................................................................45 Chapter 5 Putting AI to Work on Big Data ......................................................................53 Chapter 6 Weighing Your Options ....................................................................................61 PART II Machine Learning ...................................................................................65 Chapter 7 What Is Machine Learning? ............................................................................67 Chapter 8 Different Ways a Machine Learns ..................................................................83 Chapter 9 Popular Machine Learning Algorithms ..........................................................95 Chapter 10 Applying Machine Learning Algorithms ......................................................115 Chapter 11 Words of Advice .............................................................................................125 PART III Artificial Neural Networks ....................................................................129 Chapter 12 What Are Artificial Neural Networks?..........................................................131 Chapter 13 Artificial Neural Networks in Action ............................................................143 Chapter 14 Letting Your Network Learn .........................................................................155 Chapter 15 Using Neural Networks to Classify or Cluster .............................................169 Chapter 16 Key Challenges ..............................................................................................175 PART IV Putting Artificial Intelligence to Work .................................................179 Chapter 17 Harnessing the Power of Natural Language Processing ..............................181 Chapter 18 Automating Customer Interactions ..............................................................193 9780136556619_print.indb 7 21/10/20 4:10 PM viii ARTIFICIAL INTELLIGENCE FOR BUSINESS Chapter 19 Improving Data-Based Decision-Making .....................................................199 Chapter 20 Using Machine Learning to Predict Events and Outcomes ........................207 Chapter 21 Building Artificial Minds ...............................................................................219 Index ...............................................................................................................231 A01_Rose_FM_p00i-pxxviii.indd 8 22/10/20 2:32 PM Contents Foreword ........................................................................................................ xv Preface ........................................................................................................... xix PART I Thinking Machines: An Overview of Artificial Intelligence ...................1 Chapter 1 What Is Artificial Intelligence? .......................................................................3 What Is Intelligence? ............................................................................................. 4 Testing Machine Intelligence ................................................................................ 6 The General Problem Solver ................................................................................. 8 Strong and Weak Artificial Intelligence .............................................................. 11 Artificial Intelligence Planning ............................................................................ 14 Learning over Memorizing .................................................................................. 15 Chapter Takeaways .............................................................................................. 18 Chapter 2 The Rise of Machine Learning ......................................................................19 Practical Applications of Machine Learning ....................................................... 22 Artificial Neural Networks ................................................................................... 24 The Fall and Rise of the Perceptron ................................................................... 27 Big Data Arrives ................................................................................................... 30 Chapter Takeaways .............................................................................................. 33 Chapter 3 Zeroing in on the Best Approach ..................................................................35 Expert System Versus Machine Learning ........................................................... 35 Supervised Versus Unsupervised Learning ........................................................ 37 Backpropagation of Errors .................................................................................. 38 Regression Analysis .............................................................................................. 41 Chapter Takeaways .............................................................................................. 43 Chapter 4 Common AI Applications ..............................................................................45 Intelligent Robots ................................................................................................ 45 Natural Language Processing .............................................................................. 48 The Internet of Things ....................................................................................... 50 Chapter Takeaways .............................................................................................. 51 9780136556619_print.indb 9 21/10/20 4:10 PM x ARTIFICIAL INTELLIGENCE FOR BUSINESS Chapter 5 Putting AI to Work on Big Data ....................................................................53 Understanding the Concept of Big Data ...........................................................