Artificial Intelligence
Artificial intelligence (also referred to as "AI" or "machine intelligence") is the domain of computer science that involves programming computers to operate in ways we perceive as intelligent. What began as rule-based expert systems has evolved through deep learning into large language models, generative AI, and increasingly autonomous AI agents.
The pace of transformation has been staggering. In 2023, frontier models like GPT-4 demonstrated reasoning capabilities that surprised even their creators. By 2025, AI inference costs had dropped 92% from early GPT-4 era pricing, with per-million-token costs falling from $30 to as low as $0.10–$2.50. Open-source models like DeepSeek and Meta's Llama began matching frontier model quality at a fraction of the cost, fundamentally reshaping the economics of intelligence.
This cost deflation has crossed a critical threshold. AI is no longer confined to narrow tasks—it writes code, generates images and video, composes music, analyzes legal documents, and powers autonomous agents that can operate for hours without human intervention. The autonomous task horizon (how long an AI agent can work independently) has doubled from minutes to over 14 hours in just 18 months, according to METR benchmarks.
Perhaps the most significant shift is the emergence of agentic AI—systems that don't just respond to prompts but take autonomous action. AI agents can now browse the web, write and execute code, manage databases, and coordinate with other agents to accomplish complex goals. This has given rise to entirely new disciplines like agentic engineering and tools like the Model Context Protocol (MCP) that standardize how agents interact with external systems.
In gaming and the metaverse, AI supports advanced interfaces that interpret speech, gesture, and emotion. AI generates characters, animations, environments, and entire game systems. It powers generative engine optimization—a new discipline replacing traditional SEO as AI-mediated discovery transforms how people find information and products online.
The gap between AI investment and actual impact remains the defining tension of 2026. Some $211 billion in AI venture capital flowed in 2025—representing 50% of all global VC—yet only 6% of organizations report significant earnings impact. The outlier effect is dramatic: top-quartile AI users see 6x productivity improvements over everyone else, suggesting the technology's potential is real but unevenly distributed.