Today, we continue our series on the mind-blowing technologies transforming the human condition… and how to profit from them.

From Chris Wood, editor, Casey Extraordinary Technology: In 2011, a game show contestant changed the world.

Millions of Americans tuned in to quiz show Jeopardy! to watch legendary contestants Ken Jennings and Brad Rutter compete against a supercomputer named Watson.

Over three days, Jennings, Rutter, and tech giant IBM’s supercomputer answered questions about Beatles songs, Olympic history, and U.S. cities.

Watson gained an early lead. But Jennings and Rutter caught up when Watson struggled with questions in the “name the decade” category.

In the end, Watson won the $1 million prize… and the world saw what an artificial intelligence (AI) like Watson could do.

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Watson can take in massive amounts of information. It’s then able to learn from that information. The more information it’s fed, the more of an “expert” it becomes. And unlike a human, an AI is able to retain everything it learns. It doesn’t forget.

Watson can also understand human language. As anyone who watches Jeopardy! knows, contestants don’t just answer questions. They’re given clues. So Watson had to understand what was being asked before finding the answer.

Since Jeopardy!, IBM and Watson have been working with a handful of companies (mostly in the medical field) to solve real-world problems.

For example, 16 of the most prestigious cancer centers in North America use Watson to help recommend therapies for patients. Watson sorts through mountains of information to match the genetics of a patient’s cancer with drugs that might be able to help. It often takes a team of researchers weeks to finish this type of task. Watson does it in seconds.

Watson can also help doctors diagnose illnesses by sorting through hundreds of thousands of scientific papers, case reports, clinical trials, and textbooks.

According to Dr. Larry Norton of Memorial Sloan Kettering Cancer Center, having information like this readily available will “basically make every doctor the most experienced doctor in the world…”

And this is just one example of AI’s incredible applications.

The term “artificial intelligence” has no universally agreed-upon definition. The leading textbook in the field offers eight definitions.

I think of AI as a computer being able to perform tasks that a person usually performs better.

Examples of these tasks include seeing and making sense of the world around us… understanding what someone says when he or she speaks… making decisions under uncertain conditions… and learning.

This allows AI to help doctors diagnose and treat their patients… help search engines provide smarter results… and process massive amounts of information and data.

It also allows AI to help credit card companies determine fraudulent activity… recommend what books, TV shows, movies, and products you might like… and to write articles for news sites.

But these applications are just the beginning. AI can also:

  • Manage inventory, forecast sales, and help with business planning.
  • Figure out where the best location is to drill for oil or gas.
  • Diagnose mechanical problems with equipment.
  • Identify people and recognize other images in videos and photographs (which is revolutionizing marketing and security systems).
  • Translate languages.
  • Help you find love on online dating services.
  • Pick out which ads to show you when you visit websites.
  • Keep your house at the right temperature and help reduce your electricity bill with a smart thermostat, like Nest.

In other words, companies can use AI to reduce costs, make their businesses more efficient, and speed up decision-making.

The use and applications of AI will only grow in the coming years as the technology continues to evolve.

That’s why Google, Facebook, and Microsoft all operate their own AI labs. And each has bought several AI startups over the past couple of years.

Tom Austin, vice president and fellow at IT research and advisory firm Gartner, estimates that about half of all large companies are now experimenting with AI projects.

Information services company Venture Scanner is currently tracking 897 AI companies.

In short, we’ve barely scratched the surface of what AI can do. And as the use and applications of AI grow in the coming years, so will demand for the companies that implement and advance it.

This will create ample opportunities for investors in the technologies that make up AI in the years ahead.

So it makes sense to keep a close eye on the companies in this space. I currently have a number of AI companies on my radar. And I’ll likely start recommending some of these companies soon.

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