What Is Generative AI? Complex Guide for 2023

Generative AI refers to a type of artificial intelligence that generates unique content, such as images, videos, and text, instead of solely identifying patterns within preexisting data. It utilizes sophisticated algorithms and neural networks to produce diverse outputs, which find applications in areas like art, music, education, business, and more.

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Introduction

Contents

This guide is suitable for those seeking to expand their knowledge of Generative AI's mechanics, advantages, disadvantages, and practical business applications. The introduction provides an explanation of Generative AI's concept, its development over time, a review of its benefits and drawbacks, and supported by illustrative examples.

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What is Generative AI (and why does it matter)?

Generative AI is an innovative form of artificial intelligence that generates fresh and unique content, spanning images, videos, and text, which hasn't been seen before. Its ability to foster creativity and innovation holds significance in various domains, including art, music, and science.

Moreover, Generative AI offers practical applications for businesses, enabling the creation of product designs, marketing materials, and personalized customer recommendations. By harnessing Generative AI, businesses can produce compelling and distinctive content, enhance customer experiences, and attain a competitive edge.

Generative AI can generate diverse content types, including:

  • Text: Articles, product descriptions, social media posts, and chatbot responses
  • Images: Logos, product images, and personalized visuals
  • Videos: Product demonstrations, marketing videos, and personalized video content
  • Music: Background music for videos, personalized music playlists, and even complete albums
  • 3D Models: Product visualizations, architectural renderings, and game assets.

Generative AI can conduct data analysis too.

Generative AI models, such as generative adversarial networks (GANs) or variational autoencoders (VAEs), are extensively trained on datasets to understand patterns, structures, and relationships within the data.

A notable advancement in generative AI is the introduction of transformer models, like OpenAI's GPT (Generative Pre-trained Transformer), which has revolutionized the field by excelling in generating coherent and contextually relevant content, resulting in more realistic and high-quality outputs.

By leveraging these advanced models, generative AI can generate new data samples that closely resemble the patterns and characteristics of the training data, unlocking its remarkable potential in diverse domains such as art, music, science, and business applications.

Generative AI is applicable to various data types, including text, images, audio, and video. Text generation models, for instance, can produce realistic and coherent paragraphs, while image generation models can create unique visuals based on learned patterns from the training data.

The history of Generative AI

The history of generative AI dates back to the 1950s and 1960s, when computer scientists began exploring machine learning and artificial intelligence. Notably, ELIZA, a natural language processing program developed during that time, simulated conversation by analyzing and generating responses based on user input.

Over the following decades, researchers refined generative AI techniques, including the development of neural networks for more advanced data analysis. In 2014, deep learning and generative adversarial networks (GANs) garnered significant attention, enabling the creation of highly realistic images and videos.

Today, generative AI continues to rapidly advance, finding applications in art, music, literature, fashion, architecture, gaming, and more. Its evolution promises to revolutionize technology creation and interaction as it becomes increasingly influential in society.

How common is the use of AI?

Companies are indeed investing heavily in artificial intelligence. In 2021, global corporate investment in AI reached nearly $94 billion, showing a substantial increase compared to the previous year.

While there was a slight decline in annual AI investment in 2018, it was only temporary, and since then, investment in AI has grown more than sixfold. Most of the investment in AI comes from private sources, highlighting the significance of AI development worldwide.

Various studies project significant growth in the global artificial intelligence market revenue from 2018 to 2030. According to market research firm IDC, the global AI market is expected to surpass $500 billion by 2024.

Precedence Research suggests an even more significant growth, projecting the market to exceed $1.5 trillion by 2030. These projections emphasize the expanding opportunities and importance of AI in the business landscape.

Market size and revenue comparison for artificial intelligence worldwide from 2018 to 2030

How common is the use of AI_graph

Source: Statista

The adoption of AI spans across various industries, with notable utilization in service operations, corporate finance, and strategy, where approximately 20 percent of industries report its use.The financial services sector leads in employing AI in product development, with over 30 percent of respondents indicating its utilization in 2023.

However, AI implementation in manufacturing and marketing remains relatively low due to the importance of human instincts and individual decision-making in these areas, making them less conducive to AI adoption.

What do employees think about adopting AI?

While concerns about job displacement are valid, many workers in the United States focus on the potential benefits of AI. According to a survey by Gartner, 70 percent of U.S. workers express a desire to incorporate AI to some extent in their jobs. The survey also reveals that specific tasks, such as data processing, are seen as ideal for AI assistance, with 36 percent of respondents mentioning it, and an additional 50 percent expressing appreciation for AI support in this area.

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However, according to VentureBeat, privacy and security concerns have emerged as the primary factors leading survey participants to resist utilizing AI in their workplaces. To address these reservations, Gartner advises IT leaders to emphasize that the implementation of AI is not intended to replace or displace the workforce. Instead, the goal is to demonstrate how AI can enhance workers' effectiveness and enable them to focus on more valuable tasks.

Contrary to the common perception that organizations benefit from AI at the cost of their employees and that AI-driven automation can result in job losses, BCG reports that 60% of employees perceive AI as a collaborator rather than a threat to their jobs.Furthermore, organizations that have employees who find value in AI are 5.9 times more likely to experience substantial financial advantages compared to organizations where employees do not derive value from AI.

According to the findings, 64% of survey participants reported experiencing at least moderate value from utilizing AI. These individuals are 3.4 times more likely to have higher job satisfaction compared to employees who do not derive value from AI. It is worth noting that only 8% of respondents globally expressed lower job satisfaction due to the presence of AI.

How does Generative AI work?

Generative AI operates through the utilization of intricate algorithms and neural networks to produce fresh and innovative content. The process entails training a model on an extensive dataset comprising existing examples, enabling it to discern patterns and relationships within the data. Subsequently, the model employs these learned patterns to generate novel content.

The specific methodology employed in generative AI varies depending on the desired output.

For instance, in the case of image and video generation, generative models like GANs (generative adversarial networks) are frequently employed. These models consist of two neural networks—a generator network responsible for content creation and a discriminator network tasked with assessing the quality of the generated output. Through an iterative process, these networks collaborate in a feedback loop to generate outputs of progressively higher realism.

Generative AI, also known as artificial creativity, encompasses the development of AI models that can produce new and original content. This includes text, images, music, and even code. These models leverage large datasets to learn patterns, structures, and relationships within the data, allowing them to generate unique outputs. Let's explore the working process of generative AI in more detail:

  • Data collection and preprocessing: Generative AI models require a substantial amount of data to learn from. The data is collected and prepared by converting it into a suitable format for the model. For instance, text data may undergo tokenization, and images may be resized or normalized.
  • Model architecture selection: Various types of generative models exist, such as Variational Autoencoders (VAEs), Generative Adversarial Networks (GANs), and autoregressive models like Transformers. The choice of architecture depends on the specific problem and data type.
  • Model training: The generative AI model is trained using the processed data. Through unsupervised or self-supervised learning techniques, the model learns to recognize and understand patterns, such as the formation of sentences in text or the composition of colors and shapes in images.
  • Sampling and generation: Once the model is trained, it can generate new content by sampling from the learned distribution. For example, a text generation model can take a seed phrase and generate a continuation based on its understanding of language patterns. An image generation model can take random noise and generate a new image based on visual patterns it has learned.
  • Fine-tuning and evaluation: The generated outputs are evaluated for quality and diversity. The model may be fine-tuned by adjusting hyperparameters, modifying the architecture, or training it for longer durations to improve performance.

Generative AI models have numerous applications, including content creation, data augmentation, style transfer, and more. As these models continue to advance, they are expected to play an increasingly significant role in various industries and creative fields, driving innovation and expanding possibilities.

Generative AI and the use of embeddings in company data can indeed be combined to create powerful solutions for extracting insights and making informed decisions. Here's how these two techniques can be effectively integrated:

  • Preprocessing company data: The initial step involves preprocessing and cleaning the company's data to ensure it is in a suitable format for analysis. This may involve tasks such as data cleaning, normalization, and removing irrelevant information to enhance the quality of the data.
  • Creating embeddings: Embeddings are representations of data that capture the underlying relationships and patterns within it. Techniques like Word2Vec or BERT can be employed to create embeddings from the preprocessed company data. These embeddings encode semantic meaning and enable the generative AI model to understand the context and relationships within the company-specific data.
  • Fine-tuning the generative AI model: The generative AI model can be fine-tuned using the company-specific embeddings. This involves training the model on the organization's data for a shorter period, allowing it to adapt and specialize its knowledge to the specific characteristics of the company. Fine-tuning helps the model generate more relevant and accurate content that aligns with the company's context.
  • Generating insights: Once the generative AI model has been fine-tuned with the company-specific embeddings, it can be used to generate valuable insights based on the organization's data. This could involve generating summaries of internal reports, suggesting potential strategies, identifying trends and patterns, or even providing personalized recommendations.
  • Continuous improvement: As the company's data evolves over time, the embeddings can be updated to reflect these changes. By regularly incorporating new data and retraining the model, the generative AI system can stay up-to-date and continue to provide relevant and accurate insights.

By combining generative AI and embeddings of company data, organizations can unlock the full potential of their data and leverage it to gain valuable insights. This integrated approach enables a deeper understanding of the data, facilitates better decision-making, and supports continuous improvement based on evolving data requirements.

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Image source: Pexels

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Generative AI is a branch of artificial intelligence that focuses on creating new content or data based on learned patterns from existing datasets. The key notions and terms associated with Generative AI include:

Unsupervised learning

It involves training models without labeled data, allowing the model to learn patterns and structures in the data on its own.

Self-supervised learning

Models learn by predicting parts of the input data itself. This approach helps the model capture meaningful representations and relationships within the data.

Generative models

These models are designed to produce new outputs by sampling from learned distributions. Variational Autoencoders (VAEs), Generative Adversarial Networks (GANs), and autoregressive models like Transformers are popular examples of generative models.

Fine-tuning

This concept involves adapting a pre-trained model to a specific domain or context by training it on additional data. Fine-tuning helps improve the model's performance and relevance to the target task.

Embeddings

These are vector representations of data that capture semantic relationships between elements. Embeddings are often used as input for generative models, helping to encode meaning and context within the data.

Neural networks

These algorithms are modeled after the structure of the human brain and are used in generative AI to learn patterns and relationships within data.

Training data

This is the dataset used to train a generative AI model. The quality and size of the training data are crucial to the accuracy and effectiveness of the model.

Generative Adversarial Networks (GANs)

GANs are a type of generative AI model consisting of two neural networks that work together in a feedback loop. One network generates content, and the other evaluates the quality of the generated content, resulting in improved output over time.

Language models

These generative AI models are specifically designed to generate text by predicting the likelihood of words or phrases based on context.

Transfer learning

This technique involves using a pre-trained model and fine-tuning it for a specific task, rather than training from scratch. Transfer learning saves time and resources and can improve the accuracy of the model.

Overfitting

This is a common problem in generative AI where a model becomes too closely fit to the training data, resulting in poor performance when presented with new data.

By combining these key notions and techniques, generative AI can be applied to a wide range of applications, enabling the development of powerful tools that can generate novel content and insights tailored to specific contexts and needs.

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Finance

Fraud detection

AI can be used to detect fraud by analyzing patterns and anomalies in financial transactions. The technology can learn from past data to detect new types of fraud and identify suspicious activities, helping financial institutions prevent fraud and reduce financial losses.

Risk assessment

Generative AI can assist financial institutions in assessing risk more accurately and efficiently. By analyzing vast amounts of data, generative AI can identify potential risks and provide real-time insights into market trends and economic conditions. This enables businesses to make more informed investment decisions and mitigate risks effectively.

Customer service

AI solutions can enhance customer service in the finance sector. Chatbots powered by generative AI can provide personalized assistance to customers, addressing common queries and offering real-time support. This improves customer satisfaction and reduces the workload on human customer service representatives.

Portfolio optimization

Generative AI can aid financial institutions in optimizing their portfolios by identifying investment opportunities likely to yield the best returns. By analyzing market trends and historical data, generative AI provides insights into investments with higher profit potential, assisting financial institutions in making informed investment decisions.

These applications highlight how generative AI can contribute to various areas of the finance industry, improving efficiency, reducing risks, and enhancing customer experiences.

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Image source: Pexels

Retail

Personalized marketing

Generative AI can be utilized to personalize marketing campaigns for individual customers based on their past purchases, preferences, and browsing history. By analyzing this data, generative AI can provide insights into the products and services that each customer is most likely to be interested in. This enables retailers to create more effective marketing campaigns and increase sales.

Product design

Generative AI can assist with product design by generating new ideas and designs that align with customer preferences and trends. By analyzing customer feedback and purchasing patterns, generative AI can suggest new product features or designs that are likely to be well-received by customers.

Inventory management

Generative AI can help retailers optimize their inventory by predicting which products are likely to sell quickly and which may be overstocked. By analyzing data on customer demand and sales trends, generative AI can provide real-time insights into high-demand products and recommend adjustments to inventory levels. This can help retailers reduce costs and improve overall efficiency.

Customer service

Generative AI can enhance customer service in the retail industry by providing real-time support and assistance to customers. Chatbots powered by generative AI can address common questions and issues, freeing up human customer service representatives to focus on more complex tasks.

Overall, generative AI holds the potential to transform the retail industry by improving efficiency, boosting sales, and enhancing the customer experience.

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Image source: Pexels

Marketing

Product visualizations

Generative AI can create 3D visualizations of products that can be used in marketing materials, such as product videos and images. By using generative AI, marketers can save time and resources compared to traditional methods of creating 3D models.

Personalized image and video content

Generative AI can generate personalized image and video content that resonates with each customer. By analyzing customer data, generative AI can create visuals that are tailored to each customer's preferences and behavior, resulting in more engaging and relevant marketing materials.

Creative exploration

Generative AI can explore different creative possibilities for marketing visuals. By inputting different parameters, such as color schemes and image styles, generative AI can generate a variety of image and video options for marketers to choose from. This enables marketers to experiment with different creative concepts and find the most impactful visual elements for their campaigns.

Video editing

Generative AI can automate the video editing process, making it easier and faster for marketers to create high-quality videos. For example, generative AI can automatically add transitions, subtitles, and other effects to videos, streamlining the editing workflow and saving time for marketers.

Generative AI in marketing offers a range of possibilities to create personalized, visually appealing, and engaging content. By leveraging generative AI technologies, marketers can optimize their ad targeting, enhance their marketing analytics, and streamline content creation processes, ultimately leading to more effective and impactful marketing campaigns.

  • Product visualizations: Generative AI can generate 3D visualizations of products that can be used in marketing materials, such as product videos and images. By utilizing generative AI, marketers can save time and resources compared to traditional methods of creating 3D models.
  • Personalized image and video content: Generative AI can generate personalized image and video content that resonates with each customer. By analyzing customer data, generative AI can create visuals that are tailored to individual preferences and behaviors, resulting in more engaging and relevant marketing materials.
  • Creative exploration: Generative AI can explore different creative possibilities for marketing visuals. By inputting various parameters, such as color schemes and image styles, generative AI can generate a variety of image and video options for marketers to choose from. This allows marketers to experiment with different creative concepts and discover the most impactful visual elements for their campaigns.
  • Video editing: Generative AI can automate the video editing process, making it easier and faster for marketers to create high-quality videos. For instance, generative AI can automatically add transitions, subtitles, and other effects to videos, streamlining the editing workflow and saving time for marketers.

Generative AI in marketing offers a range of possibilities to create personalized, visually appealing, and engaging content. By leveraging generative AI technologies, marketers can optimize ad targeting, enhance marketing analytics, and streamline content creation processes, ultimately leading to more effective and impactful marketing campaigns.

SEO optimization

Helping marketers with SEO optimization by analyzing search engine data to identify keywords and phrases that are relevant to their content. By using generative AI to optimize their content for search engines, marketers can improve their search engine rankings and attract more traffic to their website.

Additionally, AI can be used to generate meta descriptions and title tags that are optimized for search engines, further enhancing their website's search engine visibility.

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Source: Pexels

Healthcare

Generative AI has enormous potential to transform the healthcare industry by improving patient outcomes, reducing costs, and advancing medical research. Here are a few ways generative AI can be used in healthcare:

Medical imaging analysis

Analyzing medical images such as X-rays, CT scans, and MRI scans. By detecting patterns and anomalies in these images, generative AI can assist radiologists in identifying potential health issues and making more accurate diagnoses.

Drug discovery

Assisting in drug discovery by generating new chemical compounds that could serve as potential treatments for various diseases. By analyzing large datasets of existing drugs and their effects, generative AI can generate new compounds that may exhibit similar or improved therapeutic effects.

Personalized medicine

Developing personalized treatment plans for individual patients based on their unique medical history, genetic makeup, and lifestyle factors. By analyzing large datasets of patient data, generative AI can identify patterns and correlations that enable healthcare providersto create personalized treatment plans that are more effective than generic approaches.

Medical research

Analyzing vast amounts of medical data to identify patterns and trends that can aid researchers in making new discoveries and advancements in medical science. Generative AI can help researchers uncover insights from complex datasets, leading to improved understanding and breakthroughs in various fields of medicine.

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Tech: Product Development

AI can be employed in the development of digital products, accelerating the creation process and identifying issues or challenges.

Content generation

Automatically generating content such as images, videos, or text for various applications. For example, programmers can develop algorithms that generate realistic images or videos based on specific criteria or create text generation models for tasks like automated storytelling or chatbot responses.

Data augmentation

Assisting programmers in expanding their datasets by generating synthetic data that can be used to train machine learning models. This technique can help improve model performance, especially when the original dataset is limited.

Creative tools

Serving as a creative tool for programmers and artists. They can create interactive systems that allow users to generate unique and personalized artwork, music compositions, or other forms of creative expression.

Anomaly detection

Detecting anomalies in data by learning the patterns of normal behavior. Programmers can train these models to identify abnormal or fraudulent patterns in various domains, such as finance, cybersecurity, or manufacturing.

Simulation and game development

Applying generative AI in simulation and game development to create dynamic and realistic virtual environments. Programmers can use generative models to generate terrain, populate virtual worlds with intelligent NPCs (non-player characters), or simulate natural phenomena.

Optimization and design

Utilizing generative AI in various processes and designs. For example, it can be used in architectural design to generate and evaluate different building configurations or in product design to automatically generate optimized designs based on specific constraints and requirements.

These are just a few examples of how programmers can incorporate generative AI into their work, but the possibilities are vast and continually expanding as the field progresses.

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Generative AI has numerous potential benefits, as well as some drawbacks. Here are the most significant pros and cons of generative AI

Pros

  • Productivity: Generating content quickly and easily, often in real-time or on the spot, without much pre-planning or preparation. This could refer to creating written content, such as articles or blog posts, or visual content, such as graphics or videos. The ability to create content on the fly is often associated with the use of generative AI, which can automate the process of content creation and generate new content on demand.
  • Efficiency: Automating repetitive tasks, such as generating images or text, allowing humans to focus on more complex and creative work.
  • Task automation: Automating repetitive or time-consuming tasks, such as data entry, image tagging, and content creation. By automating these tasks, businesses can save time and reduce the risk of errors.
  • Personalization: Tailoring customer experiences, such as product recommendations or marketing materials, to individual preferences.
  • Innovation: Developing new products, designs, and concepts, fostering innovation in various industries.
  • Process optimization: Analyzing data and identifying patterns and insights that help businesses optimize their processes and workflows. This can enhance productivity, reduce costs, and increase revenue.
  • Customer experience: By analyzing customer behavior and preferences, generative AI can generate customized content, such as personalized product recommendations or marketing materials, that resonate with individual users. This can lead to faster response times and a more seamless experience for customers. Additionally, by analyzing customer feedback and market trends, generative AI can generate new product ideas and designs that align with customer preferences.
  • Improving product development: Generative AI can assist in generating new product ideas, designs, and prototypes, expediting the product development process and bringing new products to market faster. One application is automated code generation, which involves using machine learning algorithms to automatically generate code based on high-level specifications provided by the developer. The tools like Kite, Hugging Face, and OpenAI Codex, can accelerate development and reduce errors, but they should be used alongside skilled developers who understand software architecture and design principles to complement human expertise rather than replace it.

Cons

  • Bias: Generative AI is only as unbiased as the data it is trained on. If the training data contains bias, the model will reflect that bias in its output. For example, if a generative AI model is trained on a dataset biased against certain demographic groups, it may generate outputs that discriminate against those groups. This could perpetuate systemic biases or create unfair outcomes. To address this issue, it's crucial to use diverse and representative datasets when training generative AI models. Additionally, ongoing monitoring and evaluation of the model's output can help identify and address any biases that may emerge over time.
  • Ethics: The creation of generative AI content raises ethical concerns regarding ownership, authenticity, and accountability.
  • Security: The use of generative AI can raise security concerns, such as the creation of convincing fake content or the manipulation of data.
  • Accuracy: Generative AI models can sometimes struggle to accurately capture the nuances and complexity of the real world, leading to errors and inaccuracies.

Overall, the benefits of generative AI are significant, but it's important to be aware of its potential drawbacks and take steps to mitigate them.

How to use generative AI for business? The essential tips

  • Define your goals: Before delving into the utilization of generative AI, it is vital to clearly define your goals and objectives. What specific problem or challenge do you aim to solve with generative AI? Understanding your goals will assist in selecting the appropriate tools and approach for your project.
  • Gather high-quality data: The accuracy and effectiveness of generative AI models rely on the quality of the data used for training. Ensure to collect high-quality data from reputable sources and meticulously clean and preprocess the data before feeding it into your model.
  • Choose the suitable tools: Numerous tools and platforms exist for generative AI, each with its own strengths and weaknesses. Consider factors such as ease of use, customization options, and compatibility with your existing technology stack when selecting the appropriate tool for your requirements.
  • Test and iterate: Similar to any machine learning model, generative AI models require testing and iteration to enhance their accuracy and effectiveness. Initiate with a small dataset and continue to test and refine your model as you gather more data and receive feedback.
  • Consider ethics and bias: Generative AI has the potential to generate biased or unethical content. Reflect on the ethical implications of your generative AI usage and take measures to mitigate bias, ensuring that your models produce fair and representative content.
  • Stay updated: The field of generative AI constantly evolves, with new tools and techniques being developed regularly. Stay updated with the latest research and developments to ensure that you employ the most effective approaches and tools for your project.

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There are several generative AI tools available for businesses. The choice of the best tool depends on the specific use case, the level of customization required, and the technical expertise of the user. Here are some of the most popular generative AI tools available:

OpenAI GPT-3

OpenAI's GPT-3 is one of the most advanced generative AI models available, capable of generating human-like text, images, and even code. It is highly customizable and can be used for a wide range of applications, including chatbots, content creation, and product recommendations.

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Image source: Pexels

Google Cloud AutoML

Google Cloud AutoML is a suite of tools that allows users to build and train custom machine learning models without requiring extensive technical expertise. It includes a range of generative AI tools, such as AutoML Vision and AutoML Natural Language, that can be used to create custom image and text recognition models.

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Image source: Google Cloud AutoML

Hugging Face Transformers

Hugging Face Transformers is an open-source library of pre-trained generative AI models, including GPT-2 and GPT-3, that can be fine-tuned for specific use cases. It is highly customizable and can be used for a wide range of applications, including chatbots, content creation, and sentiment analysis.

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Image source: Hugging Face Transformers

IBM Watson Studio

IBM Watson Studio is a cloud-based platform that allows users to build and deploy machine learning models. It includes a range of generative AI tools, such as Watson Natural Language Understanding and Watson Assistant, that can be used for a wide range of applications, including chatbots, sentiment analysis, and content creation.

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Image source: IBM Watson Studio

NVIDIA Merlin

NVIDIA Merlin is a suite of tools for building and deploying machine learning models on NVIDIA GPUs. It includes a range of generative AI tools, such as NVIDIA Megatron and NVIDIA Triton, that can be used for a wide range of applications, including chatbots, content creation, and recommendation engines.

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Image source: NVIDIA Merlin

These are just a few of the many generative AI tools available for businesses. It's important to carefully evaluate each tool and choose the one that best meets your specific needs and requirements.

Patryk Szczygło

Patryk is an engineer leading R&D department to develop more knowledge in cutting edge technologies. High expertise in blockchain, extended reality and mobile development helps him tackle the hardest technical problems. Working in fast and demanding environment develops necessary soft skills to manage R&D teams.

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