AI for Business: What Is AI and How Will It Impact Work?

If you’re among the 31% of Americans who are almost always online, you’ve likely heard a lot about artificial intelligence (AI).¹ If you’re online a moderate amount of the time, you’ve probably heard of it but aren’t certain about exactly what it is and how it will affect your life and work.

That’s understandable. Even among experts, opinions are wildly mixed. Almost half of AI researchers believe that there’s about a 10% chance AI could eventually bring about human extinction, while others believe AI technology will save the world.^2,3

In the meantime, practical AI applications are already significantly changing our business processes. This article will explain what AI is and the impact of AI on business, including benefits and challenges it presents.

Artificial intelligence simulates human intelligence in machines. Software engineers design programs that can think and act like humans in a limited capacity. There are three core technologies that make this possible: machine learning (ML), neural networks and natural language processing.⁴

Machine learning refers to algorithms that can learn from large datasets. Neural networks comprise a subset of ML that uses interconnected layers to process and transmit information so it can be used to make decisions. Natural language processing allows machines to understand, analyze and generate human language.⁴

Despite its sudden hype, AI isn’t a new concept; it predates modern computers. However, progress was slow or nonexistent until recent advancements in computing and data processing capabilities sped things up.⁵

Part of the confusion about the impact of artificial intelligence in business comes from terminology. People use the term when talking about applications as limited as a smartphone’s autocorrect and as vast as killer robots that act out their own objectives. AI can be classified as narrow AI or general AI.⁶

Narrow AI is designed for specific tasks and operates within a limited scope. These systems perform predefined functions and can’t operate beyond their programmed capabilities. This is the only type of AI that currently exists. Every functional AI application, from virtual assistants such as Alexa to generative chatbots such as ChatGPT, is narrow AI.⁶

General AI is currently only a concept, and it refers to artificial intelligence that can understand, learn and apply knowledge across a wide range of tasks, similar to the functions of the human brain. While this is a desired goal of AI research, most experts believe we’re still decades away from it.⁷

Despite the title, narrow AI has broad applications in business. Some of the most common impacts of artificial intelligence in business include the following:

AI automates repetitive, mundane, time-consuming tasks and can free up humans for more complex activities. In offices, AI can automate data entry, scheduling and report generation to increase productivity and reduce errors.⁸

Artificial intelligence can improve the customer experience. AI-driven chatbots and virtual assistants provide 24/7 customer support. They can answer questions, resolve issues and guide customers through setup and troubleshooting processes. These tools can improve response times and customer satisfaction.⁹

AI can save time, as it quickly processes and analyzes large datasets. Businesses use AI to gain insights from data, identify trends and make strategic decisions. In finance, AI can assess market data to inform investment decisions.¹⁰

With AI platforms, businesses have the ability to forecast market trends, demand and potential risks. Retailers use AI to predict inventory needs so they can reduce waste and avoid running out of stock. Financial institutions use AI to forecast market trends and manage risk.¹¹

Artificial intelligence affects business primarily by increasing productivity and saving money. This efficiency can displace human workers, particularly those who perform repetitive tasks that are easily automated. To compensate, business leaders will need to invest in training programs to equip employees with the necessary skills to change roles and minimize disruptions in the workforce.¹²

As with all new technologies, AI will lead to the employment of people with more specialized skills, such as data scientists and machine learning engineers. Traditional roles also adapt, with professionals using AI tools to improve their work, such as marketers who use AI for customer insights and personalization.¹²

The impact of artificial intelligence on business is most noticeable in its relentless performance. Once AI has been trained to perform a task within its scope, it can typically do it faster and more accurately than humans can. AI doesn’t get tired, for example, and it can work around the clock. It doesn’t accidentally put numbers in the wrong column or forget to add a number when performing calculations. Its automation presents a competitive advantage, as it speeds up routine jobs and reduces errors, which lowers operating costs for businesses.¹³

In customer service, digital personal assistants can provide personalized interactions without putting customers on hold. AI algorithms can analyze customer data to offer customized purchasing recommendations, which can improve customer satisfaction and loyalty.¹³

AI tools can also provide a high-level overview of business operations, helping leaders to make better decisions. Companies can extract hidden patterns in extensive datasets to make choices more quickly and accurately.¹³

Although it has many benefits, implementing AI tools in business comes with challenges. Because AI solutions are only as good as the data they train on, they can perpetuate preexisting biases that can cause unfair outcomes in areas such as hiring and financial lending.¹⁴

Artificial intelligence presents significant privacy risks. AI systems often require large amounts of personal data and can raise issues with how this data is collected, stored and used. Although there’s currently only one AI-specific regulation—the European Union’s AI Act—artificial intelligence tools have to comply with existing data privacy and consumer protection regulations.¹⁴

Other challenges arise thanks to the cost and complexity of implementing AI. Significant investment in technology and skilled personnel is required in order to develop and integrate AI systems. Similarly, maintaining and updating these systems involves ongoing expense and effort.¹⁴

Artificial intelligence has rapidly gone from a fringe application to a necessary component of daily business operations. William & Mary’s Online MBA program instills the skills you need to deal with modern business challenges and opportunities such as AI. Our innovative program both incorporates and goes beyond specific technologies. You’ll learn how to use AI to drive business success, but you’ll also learn timeless global leadership and problem-solving skills that will outlast any technology.

Complete your MBA online in as little as two years in the acclaimed Raymond A. Mason School of Business. The Online MBA curriculum blends the best of William & Mary—a "Public Ivy" education, world-class faculty, small classes and a close-knit, global community—with the convenience of an online program.

To learn more, schedule a call with one of our admissions outreach advisors today.