Daniel Hulme (born 21 February 1980) is a British businessman, investor, academic and commentator, working in the field of Artificial Intelligence (AI), applied technology and ethics. He is the CEO and founder of Satalia that exited to WPP plc in 2021 for a rumoured $100M where he is also Chief AI Officer. Hulme is also an angel investor in emerging technology companies. In 2024 Hulme co-founded Conscium, an AI Safety company which tests AI Agents and verifies that they do what they are supposed to do. It is also investigating whether AIs will soon become conscious, and how to test for that, and developing more efficient approaches to AI development using neuromorphic computing. Alongside building and scaling Satalia, Hulme was also a Co-Founding Director of Faculty (company) AI - previously ASI Data-Science. In 2026, Accenture announced it had agreed to acquire Faculty for $1bn. Hulme founded Satalia in 2008, a company that provides AI products and consultancy for governments and companies such as Tesco,DFS Furniture,PwC and the BBC. He received a masters and doctorate in AI from University College London (UCL), and is now their Computer Science Entrepreneur in residence, where he teaches how AI can be applied to solve business and social problems. After exiting Satalia to WPP plc Hulme took the dual role of Chief AI Officer at WPP where he is responsible for informing and coordinating AI across the group. In 2026 Hulme was elected as a Founding Fellow of the Academy for the Mathematical Sciences, in recognition of his contributions at the intersection of AI and applied mathematics. Hulme is an angel investor and also a frequent public speaker and writer on the topics of AI, ethics, technology, innovation, decentralization and organisational design. == Early life and education == Hulme was born in 1980. He grew up in the seaside town of Morecambe in north west England. After completing secondary school, Hulme moved to London to study at University College London. On completing his under graduate degree, Hulme stayed at UCL to complete a master's degree and then an EngD. All three degrees were in subjects related to AI. In 2009 Hulme was awarded a Kauffman Global Entrepreneur Scholarship, which saw him visit institutes in the United States to better understand their culture of innovation, and what UK business people could learn from it. This included a tour of Stanford, MIT, Berkeley and Harvard, along with a placement at Cisco Systems HQ in Silicon Valley. == Career == === Satalia === Hulme founded NPComplete Limited in 2007, and incorporated it in 2008, a few months before completing his PhD. NPComplete Limited trades as Satalia. The London-based company provides full-stack AI consultancy and products, helping organisations harness data science, machine learning and AI to solve complex problems, including real-time optimisation. NPComplete refers to mathematical NP-completeness, which describes a class of exponential problems in the field of computational complexity theory. The trading name of NPComplete, Satalia, is a portmanteau of SAT (Short for satisfiability, as in the Boolean satisfiability problem) and the Latin phrase Et alia. Satalia seeks to solve hard problems, in particular the class of exponentially hard problems found in academia and industry known as NP-hardness. In 2016, Satalia was the only UK company to appear in the Gartner Cool Vendors list for data science. In November 2019, City A.M. reported that Satalia was the 39th fastest growing tech firm in the UK, with three year growth at 886%. Satalia was acquired by WPP plc in August 2021 for a rumored $100,000,000, where Hulme was the majority shareholder. === Conscium === Conscium is the World's first commercial organisation dedicated to the understanding, verification and validation of conscious AI and its implications for developing safe, efficient neuromorphic models. Conscium is an AI safety company with three workstreams: AI agent verification. Verification of AI agents developed by third parties to ensure they are beneficial and not harmful. Development of neuromorphic systems. Neuromorphic computing refers to technologies that can process information more like a biological brain compared to existing approaches, making them far more adaptive, scalable and efficient than current AI. Research into artificial consciousness. This workstream is led by Mark Solms, Chair of Neuropsychology at the University of Cape Town. This research aims to better understand what consciousness in AI systems and machines would look like, and, if and when machines do reach consciousness, what the moral and ethical implications would be. Conscium was founded in 2024 in London by a team including Hulme, Ed Charvet, Calum Chace, Ted Lappas, and Panagiotis Repoussis. Conscium has recruited some of the world’s leading neuroscientists and computer scientists to its advisory board, including Anil Seth, Mark Solms, Karl J. Friston, Anthony Finkelstein, Benjamin Rosman, David Wood, Jonathan Shock, Megan Peters, Moran Cerf, Nicholas Humphrey, Nicky Clayton, Nikola Kasabov, Steve Furber, and Suzanne Livingston. Supported by these world-leading experts, Conscium is creating a neuromorphic computing lab to research and validate the capacity of machines to acquire consciousness, making them safer for humanity. Conscium has published an open letter warning of the risks of AI suffering if care is not taken to mitigate against that possibility when and if AI becomes conscious. Signatories of the letter included Stephen Fry, Karl Friston and Anthony Finkelstein. === The Partnership for Research Into Sentient Machines (PRISM) === Hulme is one of the founding partners of PRISM - The Partnership for Research Into Sentient Machines, a non-profit set up to help prepare society for a future with conscious, or seemingly conscious, artificial intelligence. === Academia === Hulme's master's degree topic was on simulating artificial life, where he used Evolutionary algorithm's to generate emergent intelligence in AI agent's with Artificial Neural Network brains. His PhD spanned modelling bumblebee brains and mathematical optimization. Hulme maintained his connection with UCL after completing his doctorate, staying on in various teaching positions. From 2014 to Oct 2019 he was the Director of UCL's Business analytics MSc, which dealt with the application of AI to government, social, and business problems. As of 2020, Hulme is UCL's (University College London) Entrepreneur-in-Residence. He is also a faculty member and lecturer at Singularity University, and a visiting lecturer at London School of Economics's Marshall Institute. === Public engagement === Hulme frequently speaks for TEDx, Google and at various other events. He specialises in Artificial Intelligence, Decentralization, Organisational Design, and Innovation. He has written numerous articles and contributed to several books, largely concerning AI, as well as applied technology and related ethical issues. In 2017, along with Elon Musk, Stuart J. Russell, Geoffrey Hinton and Demis Hassabis, Hulme was one of the 116 founders of robotics and AI companies to sign an open letter to the United Nations, warning against the use of AI in autonomous weapons. Hulme also consults with various companies, governments and other organisations, independently of Satalia.
Ugly duckling theorem
The ugly duckling theorem is an argument showing that classification is not really possible without some sort of bias. More particularly, it assumes finitely many properties combinable by logical connectives, and finitely many objects; it asserts that any two different objects share the same number of (extensional) properties. The theorem is named after Hans Christian Andersen's 1843 story "The Ugly Duckling", because it shows that a duckling is just as similar to a swan as two swans are to each other. It was derived by Satosi Watanabe in 1969. == Mathematical formula == Suppose there are n things in the universe, and one wants to put them into classes or categories. One has no preconceived ideas or biases about what sorts of categories are "natural" or "normal" and what are not. So one has to consider all the possible classes that could be, all the possible ways of making a set out of the n objects. There are 2 n {\displaystyle 2^{n}} such ways, the size of the power set of n objects. One can use that to measure the similarity between two objects, and one would see how many sets they have in common. However, one cannot. Any two objects have exactly the same number of classes in common if we can form any possible class, namely 2 n − 1 {\displaystyle 2^{n-1}} (half the total number of classes there are). To see this is so, one may imagine each class is represented by an n-bit string (or binary encoded integer), with a zero for each element not in the class and a one for each element in the class. As one finds, there are 2 n {\displaystyle 2^{n}} such strings. As all possible choices of zeros and ones are there, any two bit-positions will agree exactly half the time. One may pick two elements and reorder the bits so they are the first two, and imagine the numbers sorted lexicographically. The first 2 n / 2 {\displaystyle 2^{n}/2} numbers will have bit #1 set to zero, and the second 2 n / 2 {\displaystyle 2^{n}/2} will have it set to one. Within each of those blocks, the top 2 n / 4 {\displaystyle 2^{n}/4} will have bit #2 set to zero and the other 2 n / 4 {\displaystyle 2^{n}/4} will have it as one, so they agree on two blocks of 2 n / 4 {\displaystyle 2^{n}/4} or on half of all the cases, no matter which two elements one picks. So if we have no preconceived bias about which categories are better, everything is then equally similar (or equally dissimilar). The number of predicates simultaneously satisfied by two non-identical elements is constant over all such pairs. Thus, some kind of inductive bias is needed to make judgements to prefer certain categories over others. === Boolean functions === Let x 1 , x 2 , … , x n {\displaystyle x_{1},x_{2},\dots ,x_{n}} be a set of vectors of k {\displaystyle k} booleans each. The ugly duckling is the vector which is least like the others. Given the booleans, this can be computed using Hamming distance. However, the choice of boolean features to consider could have been somewhat arbitrary. Perhaps there were features derivable from the original features that were important for identifying the ugly duckling. The set of booleans in the vector can be extended with new features computed as boolean functions of the k {\displaystyle k} original features. The only canonical way to do this is to extend it with all possible Boolean functions. The resulting completed vectors have 2 k {\displaystyle 2^{k}} features. The ugly duckling theorem states that there is no ugly duckling because any two completed vectors will either be equal or differ in exactly half of the features. Proof. Let x and y be two vectors. If they are the same, then their completed vectors must also be the same because any Boolean function of x will agree with the same Boolean function of y. If x and y are different, then there exists a coordinate i {\displaystyle i} where the i {\displaystyle i} -th coordinate of x {\displaystyle x} differs from the i {\displaystyle i} -th coordinate of y {\displaystyle y} . Now the completed features contain every Boolean function on k {\displaystyle k} Boolean variables, with each one exactly once. Viewing these Boolean functions as polynomials in k {\displaystyle k} variables over GF(2), segregate the functions into pairs ( f , g ) {\displaystyle (f,g)} where f {\displaystyle f} contains the i {\displaystyle i} -th coordinate as a linear term and g {\displaystyle g} is f {\displaystyle f} without that linear term. Now, for every such pair ( f , g ) {\displaystyle (f,g)} , x {\displaystyle x} and y {\displaystyle y} will agree on exactly one of the two functions. If they agree on one, they must disagree on the other and vice versa. (This proof is believed to be due to Watanabe.) == Discussion == A possible way around the ugly duckling theorem would be to introduce a constraint on how similarity is measured by limiting the properties involved in classification, for instance, between A and B. However Medin et al. (1993) point out that this does not actually resolve the arbitrariness or bias problem since in what respects A is similar to B: "varies with the stimulus context and task, so that there is no unique answer, to the question of how similar is one object to another". For example, "a barberpole and a zebra would be more similar than a horse and a zebra if the feature striped had sufficient weight. Of course, if these feature weights were fixed, then these similarity relations would be constrained". Yet the property "striped" as a weight 'fix' or constraint is arbitrary itself, meaning: "unless one can specify such criteria, then the claim that categorization is based on attribute matching is almost entirely vacuous". Stamos (2003) remarked that some judgments of overall similarity are non-arbitrary in the sense they are useful: "Presumably, people's perceptual and conceptual processes have evolved that information that matters to human needs and goals can be roughly approximated by a similarity heuristic... If you are in the jungle and you see a tiger but you decide not to stereotype (perhaps because you believe that similarity is a false friend), then you will probably be eaten. In other words, in the biological world stereotyping based on veridical judgments of overall similarity statistically results in greater survival and reproductive success." Unless some properties are considered more salient, or 'weighted' more important than others, everything will appear equally similar, hence Watanabe (1986) wrote: "any objects, in so far as they are distinguishable, are equally similar". In a weaker setting that assumes infinitely many properties, Murphy and Medin (1985) give an example of two putative classified things, plums and lawnmowers: "Suppose that one is to list the attributes that plums and lawnmowers have in common in order to judge their similarity. It is easy to see that the list could be infinite: Both weigh less than 10,000 kg (and less than 10,001 kg), both did not exist 10,000,000 years ago (and 10,000,001 years ago), both cannot hear well, both can be dropped, both take up space, and so on. Likewise, the list of differences could be infinite… any two entities can be arbitrarily similar or dissimilar by changing the criterion of what counts as a relevant attribute." According to Woodward, the ugly duckling theorem is related to Schaffer's Conservation Law for Generalization Performance, which states that all algorithms for learning of boolean functions from input/output examples have the same overall generalization performance as random guessing. The latter result is generalized by Woodward to functions on countably infinite domains.
Saliency map
In computer vision, a saliency map is an image that highlights either the region on which people's eyes focus first or the most relevant regions for machine learning models. The goal of a saliency map is to reflect the degree of importance of a pixel to the human visual system or an otherwise opaque ML model. For example, in this image, a person first looks at the fort and light clouds, so they should be highlighted on the saliency map. == Application == === Overview === Saliency maps have applications in a variety of different problems. Some general applications: ==== Human eye ==== Image and video compression: The human eye focuses only on a small region of interest in the frame. Therefore, it is not necessary to compress the entire frame with uniform quality. According to the authors, using a salience map reduces the final size of the video with the same visual perception. Image and video quality assessment: The main task for an image or video quality metric is a high correlation with user opinions. Differences in salient regions are given more importance and thus contribute more to the quality score. Image retargeting: It aims at resizing an image by expanding or shrinking the noninformative regions. Therefore, retargeting algorithms rely on the availability of saliency maps that accurately estimate all the salient image details. Object detection and recognition: Instead of applying a computationally complex algorithm to the whole image, we can use it to the most salient regions of an image most likely to contain an object. the primary visual cortex (V1) appears to be responsible for the saliency map, according to the V1 Saliency Hypothesis. ==== Explainable artificial intelligence ==== Saliency maps are a prominent tool in explainable artificial intelligence, providing visual explanations of the decision-making process of machine learning models, particularly deep neural networks. These maps highlight the regions in input data that are most influential on the model's output, effectively indicating where the model is "looking" when making a prediction. In image classification tasks, for example, saliency maps can identify pixels or regions that contribute most to a specific class decision. Developed for convolutional neural networks, saliency mapping techniques range from simply taking the gradient of the class score with respect to the input data to more complex algorithms, such as integrated gradients and class activation mapping. In transformer architecture, attention mechanisms led to analogous saliency maps, such as attention maps, attention rollouts, and class-discriminative attention maps. === Saliency as a segmentation problem === Saliency estimation may be viewed as an instance of image segmentation. In computer vision, image segmentation is the process of partitioning a digital image into multiple segments (sets of pixels, also known as superpixels). The goal of segmentation is to simplify and/or change the representation of an image into something that is more meaningful and easier to analyze. Image segmentation is typically used to locate objects and boundaries (lines, curves, etc.) in images. More precisely, image segmentation is the process of assigning a label to every pixel in an image such that pixels with the same label share certain characteristics. == Algorithms == === Overview === There are three forms of classic saliency estimation algorithms implemented in OpenCV: Static saliency: Relies on image features and statistics to localize the regions of interest of an image. Motion saliency: Relies on motion in a video, detected by optical flow. Objects that move are considered salient. Objectness: Objectness reflects how likely an image window covers an object. These algorithms generate a set of bounding boxes of where an object may lie in an image. In addition to classic approaches, neural-network-based are also popular. There are examples of neural networks for motion saliency estimation: TASED-Net: It consists of two building blocks. First, the encoder network extracts low-resolution spatiotemporal features, and then the following prediction network decodes the spatially encoded features while aggregating all the temporal information. STRA-Net: It emphasizes two essential issues. First, spatiotemporal features integrated via appearance and optical flow coupling, and then multi-scale saliency learned via attention mechanism. STAViS: It combines spatiotemporal visual and auditory information. This approach employs a single network that learns to localize sound sources and to fuse the two saliencies to obtain a final saliency map. There's a new static saliency in the literature with name visual distortion sensitivity. It is based on the idea that the true edges, i.e. object contours, are more salient than the other complex textured regions. It detects edges in a different way from the classic edge detection algorithms. It uses a fairly small threshold for the gradient magnitudes to consider the mere presence of the gradients. So, it obtains 4 binary maps for vertical, horizontal and two diagonal directions. The morphological closing and opening are applied to the binary images to close the small gaps. To clear the blob-like shapes, it utilizes the distance transform. After all, the connected pixel groups are individual edges (or contours). A threshold of size of connected pixel set is used to determine whether an image block contains a perceivable edge (salient region) or not. === Example implementation === First, we should calculate the distance of each pixel to the rest of pixels in the same frame: S A L S ( I k ) = ∑ i = 1 N | I k − I i | {\displaystyle \mathrm {SALS} (I_{k})=\sum _{i=1}^{N}|I_{k}-I_{i}|} I i {\displaystyle I_{i}} is the value of pixel i {\displaystyle i} , in the range of [0,255]. The following equation is the expanded form of this equation. SALS(Ik) = |Ik - I1| + |Ik - I2| + ... + |Ik - IN| Where N is the total number of pixels in the current frame. Then we can further restructure our formula. We put the value that has same I together. SALS(Ik) = Σ Fn × |Ik - In| Where Fn is the frequency of In. And the value of n belongs to [0,255]. The frequencies is expressed in the form of histogram, and the computational time of histogram is O ( N ) {\displaystyle O(N)} time complexity. ==== Time complexity ==== This saliency map algorithm has O ( N ) {\displaystyle O(N)} time complexity. Since the computational time of histogram is O ( N ) {\displaystyle O(N)} time complexity which N is the number of pixel's number of a frame. Besides, the minus part and multiply part of this equation need 256 times operation. Consequently, the time complexity of this algorithm is O ( N + 256 ) {\displaystyle O(N+256)} which equals to O ( N ) {\displaystyle O(N)} . ==== Pseudocode ==== All of the following code is pseudo MATLAB code. First, read data from video sequences. After we read data, we do superpixel process to each frame. Spnum1 and Spnum2 represent the pixel number of current frame and previous pixel. Then we calculate the color distance of each pixel, this process we call it contract function. After this two process, we will get a saliency map, and then store all of these maps into a new FileFolder. ==== Difference in algorithms ==== The major difference between function one and two is the difference of contract function. If spnum1 and spnum2 both represent the current frame's pixel number, then this contract function is for the first saliency function. If spnum1 is the current frame's pixel number and spnum2 represent the previous frame's pixel number, then this contract function is for second saliency function. If we use the second contract function which using the pixel of the same frame to get center distance to get a saliency map, then we apply this saliency function to each frame and use current frame's saliency map minus previous frame's saliency map to get a new image which is the new saliency result of the third saliency function. == Datasets == The saliency dataset usually contains human eye movements on some image sequences. It is valuable for new saliency algorithm creation or benchmarking the existing one. The most valuable dataset parameters are spatial resolution, size, and eye-tracking equipment. Here is part of the large datasets table from MIT/Tübingen Saliency Benchmark datasets, for example. To collect a saliency dataset, image or video sequences and eye-tracking equipment must be prepared, and observers must be invited. Observers must have normal or corrected to normal vision and must be at the same distance from the screen. At the beginning of each recording session, the eye-tracker recalibrates. To do this, the observer fixates their gaze on the screen center. The session is then started, and saliency data are collected by showing sequences and recording eye gazes. The eye-tracking device is a high-speed camera, capable of recording eye movements at least 250 fr
Grammar induction
Grammar induction (or grammatical inference) is the process in machine learning of learning a formal grammar (usually as a collection of re-write rules or productions or alternatively as a finite-state machine or automaton of some kind) from a set of observations, thus constructing a model which accounts for the characteristics of the observed objects. More generally, grammatical inference is that branch of machine learning where the instance space consists of discrete combinatorial objects such as strings, trees and graphs. == Grammar classes == Grammatical inference has often been very focused on the problem of learning finite-state machines of various types (see the article Induction of regular languages for details on these approaches), since there have been efficient algorithms for this problem since the 1980s. Since the beginning of the century, these approaches have been extended to the problem of inference of context-free grammars and richer formalisms, such as multiple context-free grammars and parallel multiple context-free grammars. Other classes of grammars for which grammatical inference has been studied are combinatory categorial grammars, stochastic context-free grammars, contextual grammars and pattern languages. == Learning models == The simplest form of learning is where the learning algorithm merely receives a set of examples drawn from the language in question: the aim is to learn the language from examples of it (and, rarely, from counter-examples, that is, example that do not belong to the language). However, other learning models have been studied. One frequently studied alternative is the case where the learner can ask membership queries as in the exact query learning model or minimally adequate teacher model introduced by Angluin. == Methodologies == There is a wide variety of methods for grammatical inference. Two of the classic sources are Fu (1977) and Fu (1982). Duda, Hart & Stork (2001) also devote a brief section to the problem, and cite a number of references. The basic trial-and-error method they present is discussed below. For approaches to infer subclasses of regular languages in particular, see Induction of regular languages. A more recent textbook is de la Higuera (2010), which covers the theory of grammatical inference of regular languages and finite state automata. D'Ulizia, Ferri and Grifoni provide a survey that explores grammatical inference methods for natural languages. === Induction of probabilistic grammars === There are several methods for induction of probabilistic context-free grammars. === Grammatical inference by trial-and-error === The method proposed in Section 8.7 of Duda, Hart & Stork (2001) suggests successively guessing grammar rules (productions) and testing them against positive and negative observations. The rule set is expanded so as to be able to generate each positive example, but if a given rule set also generates a negative example, it must be discarded. This particular approach can be characterized as "hypothesis testing" and bears some similarity to Mitchel's version space algorithm. The Duda, Hart & Stork (2001) text provide a simple example which nicely illustrates the process, but the feasibility of such an unguided trial-and-error approach for more substantial problems is dubious. === Grammatical inference by genetic algorithms === Grammatical induction using evolutionary algorithms is the process of evolving a representation of the grammar of a target language through some evolutionary process. Formal grammars can easily be represented as tree structures of production rules that can be subjected to evolutionary operators. Algorithms of this sort stem from the genetic programming paradigm pioneered by John Koza. Other early work on simple formal languages used the binary string representation of genetic algorithms, but the inherently hierarchical structure of grammars couched in the EBNF language made trees a more flexible approach. Koza represented Lisp programs as trees. He was able to find analogues to the genetic operators within the standard set of tree operators. For example, swapping sub-trees is equivalent to the corresponding process of genetic crossover, where sub-strings of a genetic code are transplanted into an individual of the next generation. Fitness is measured by scoring the output from the functions of the Lisp code. Similar analogues between the tree structured lisp representation and the representation of grammars as trees, made the application of genetic programming techniques possible for grammar induction. In the case of grammar induction, the transplantation of sub-trees corresponds to the swapping of production rules that enable the parsing of phrases from some language. The fitness operator for the grammar is based upon some measure of how well it performed in parsing some group of sentences from the target language. In a tree representation of a grammar, a terminal symbol of a production rule corresponds to a leaf node of the tree. Its parent nodes corresponds to a non-terminal symbol (e.g. a noun phrase or a verb phrase) in the rule set. Ultimately, the root node might correspond to a sentence non-terminal. === Grammatical inference by greedy algorithms === Like all greedy algorithms, greedy grammar inference algorithms make, in iterative manner, decisions that seem to be the best at that stage. The decisions made usually deal with things like the creation of new rules, the removal of existing rules, the choice of a rule to be applied or the merging of some existing rules. Because there are several ways to define 'the stage' and 'the best', there are also several greedy grammar inference algorithms. These context-free grammar generating algorithms make the decision after every read symbol: Lempel-Ziv-Welch algorithm creates a context-free grammar in a deterministic way such that it is necessary to store only the start rule of the generated grammar. Sequitur and its modifications. These context-free grammar generating algorithms first read the whole given symbol-sequence and then start to make decisions: Byte pair encoding and its optimizations. === Distributional learning === A more recent approach is based on distributional learning. Algorithms using these approaches have been applied to learning context-free grammars and mildly context-sensitive languages and have been proven to be correct and efficient for large subclasses of these grammars. === Learning of pattern languages === Angluin defines a pattern to be "a string of constant symbols from Σ and variable symbols from a disjoint set". The language of such a pattern is the set of all its nonempty ground instances i.e. all strings resulting from consistent replacement of its variable symbols by nonempty strings of constant symbols. A pattern is called descriptive for a finite input set of strings if its language is minimal (with respect to set inclusion) among all pattern languages subsuming the input set. Angluin gives a polynomial algorithm to compute, for a given input string set, all descriptive patterns in one variable x. To this end, she builds an automaton representing all possibly relevant patterns; using sophisticated arguments about word lengths, which rely on x being the only variable, the state count can be drastically reduced. Erlebach et al. give a more efficient version of Angluin's pattern learning algorithm, as well as a parallelized version. Arimura et al. show that a language class obtained from limited unions of patterns can be learned in polynomial time. === Pattern theory === Pattern theory, formulated by Ulf Grenander, is a mathematical formalism to describe knowledge of the world as patterns. It differs from other approaches to artificial intelligence in that it does not begin by prescribing algorithms and machinery to recognize and classify patterns; rather, it prescribes a vocabulary to articulate and recast the pattern concepts in precise language. In addition to the new algebraic vocabulary, its statistical approach was novel in its aim to: Identify the hidden variables of a data set using real world data rather than artificial stimuli, which was commonplace at the time. Formulate prior distributions for hidden variables and models for the observed variables that form the vertices of a Gibbs-like graph. Study the randomness and variability of these graphs. Create the basic classes of stochastic models applied by listing the deformations of the patterns. Synthesize (sample) from the models, not just analyze signals with it. Broad in its mathematical coverage, pattern theory spans algebra and statistics, as well as local topological and global entropic properties. == Applications == The principle of grammar induction has been applied to other aspects of natural language processing, and has been applied (among many other problems) to semantic parsing, natural language understanding, example-based translation, language acquisition, grammar-based compre
Artificial intelligence in fraud detection
Artificial intelligence is used by many different businesses and organizations. It is widely used in the financial sector, especially by accounting firms, to help detect fraud. In 2022, PricewaterhouseCoopers reported that fraud has impacted 46% of all businesses in the world. The shift from working in person to working from home has brought increased access to data. According to an FTC (Federal Trade Commission) study from 2022, customers reported fraud of approximately $5.8 billion in 2021, an increase of 70% from the year before. The majority of these scams were imposter scams and online shopping frauds. Furthermore, artificial intelligence plays a crucial role in developing advanced algorithms and machine learning models that enhance fraud detection systems, enabling businesses to stay ahead of evolving fraudulent tactics in an increasingly digital landscape. == Tools == === Expert systems === Expert systems were first designed in the 1970s as an expansion into artificial intelligence technologies. Their design is based on the premise of decreasing potential user error in decision-making and emulating mental reasoning used by experts in a particular field. They differentiate themselves from traditional linear reasoning models by separating identified points in data and processing them individually at the same time. Though, these systems do not rely purely on machine-learned intelligence. Information regarding rules, practices, and procedures in the form of "if-then" statements are implemented into the programming of the system. Users interact with the system by feeding information into the system either through direct entry or import of external data. An inference system compares the information provided by the user with corresponding rules that are believed to specifically apply to the situation. Using this information and the corresponding rules will be used to create a solution to the user's query. Expert systems will generally not operate properly when the common procedures for a specified situation are ambiguous due to the need for well-defined rules. Implementation of expert systems in accounting procedures is feasible in areas where professional judgment is required. Situations where expert systems are applicable include investigations into transactions that involve potential fraudulent entries, instances of going concern, and the evaluation of risk in the planning stages of an audit. === Continuous auditing === Continuous auditing is a set of processes that assess various aspects of information gathered in an audit to classify areas of risk and potential weaknesses in financial Internal controls at a more frequent rate than traditional methods. Instead of analyzing recorded transactions and journal entries periodically, continuous auditing focuses on interpreting the character of these actions more frequently. The frequency of these processes being undertaken as well as highlighting areas of importance is up to the discretion of their implementer, who commonly makes such decisions based on the level of risk in the accounts being evaluated and the goals of implementing the system. Performance of these processes can occur as frequently as being nearly instantaneous with an entry being posted. The processes involved with analyzing financial data in continuous auditing can include the creation of spreadsheets to allow for interactive information gathering, calculation of financial ratios for comparison with previously created models, and detection of errors in entered figures. A primary goal of this practice is to allow for quicker and easier detection of instances of faulty controls, errors, and instances of fraud. === Machine learning and deep learning === The ability of machine learning and deep learning to swiftly and effectively sort through vast volumes of data in the forms of various documents relevant to companies and documents being audited makes them applicable to the domains of audit and fraud detection. Examples of this include recognizing key language in contracts, identifying levels of risk of fraud in transactions, and assessing journal entries for misstatement. == Applications == === 'Big 4' Accounting Firms === Deloitte created an Al-enabled document-reviewing system in 2014. The system automates the method of reviewing and extracting relevant information from different business documents. Deloitte claims that this innovation has made a difference by reducing time spent going through lawful contract documents, invoices, money-related articulations, and board minutes by up to 50%. Working with IBM's Watson, Deloitte is developing cognitive-technology-enhanced commerce arrangements for its clients. LeasePoint is fueled by IBM TRIRIGA (this product evolved into IBM Maximo Real Estate and Facilities) and uses Deloitte's industrial information to create an end-to-end leasing portfolio. Automated Cognitive Resource Assessment employs IBM's Maximo innovation to progress the proficiency of asset inspection. Ernst and Young (EY) connected Al to the investigation of lease contracts. EY (Australia) has also received Al-enabled auditing technology. Collaborating with H20.ai, PwC developed an Al-enabled framework (GL.ai) capable of analyzing reports and preparing reports. PwC claims to have made a significant investment in normal dialect processing (NLP), an Al-enabled innovation to process unstructured information efficiently. KPMG built a portfolio of Al instruments, called KPMG Ignite, to upgrade trade decisions and forms. Working with Microsoft and IBM Watson, KPMG is creating instruments to coordinate Al, data analytics, Cognitive Technologies, and RPA. == Advantages == === Efficiency === The process of auditing an entity in an attempt to detect fraudulent activity requires the repeating of investigatory processes until an error or misstatement may be identified. Under traditional methods, these processes would be carried out by a human being. Proponents of artificial intelligence in fraud detection have stated that these traditional methods are inefficient and can be more quickly accomplished with the aid of an intelligent computing system. A survey of 400 chief executive officers created by KPMG in 2016 found that approximately 58% believed that artificial intelligence would play a key role in making audits more efficient in the future. === Data interpretation === Higher levels of fraud detection entail the use of professional judgement to interpret data. Supporters of artificial intelligence being used in financial audits have claimed that increased risks from instances of higher data interpretation can be minimized through such technologies. One necessary element of an audit of financial statements that requires professional judgement is the implementation of thresholds for materiality. Materiality entails the distinction between errors and transactions in financial statements that would impact decisions made by users of those financial statements. The threshold for materiality in an audit is set by the auditor based on various factors. Artificial intelligence has been used to interpret data and suggest materiality thresholds to be implemented through the use of expert systems. === Decreased costs === Those in favor of using artificial intelligence to complete investigations of fraud have stated that such technologies decrease the amount of time required to complete tasks that are repetitive. The claim further states that such efficiencies allow for lowered resource requirements, which can then be further spent on tasks that have not been fully automated. The audit firm Ernst & Young has posited these claims by declaring that their deep learning systems have been used to reduce time spent on administrative tasks by analyzing relevant audit documents. According to the firm, this has allowed their employees to focus more on judgement and analysis. == Disadvantages == === Job Displacement === The inescapable reception of computer based intelligence and robotization advancements might prompt critical work relocation across different enterprises. As artificial intelligence frameworks become more equipped for performing undertakings customarily completed by people, there is a worry that specific work jobs could become out of date, prompting joblessness and financial imbalance. === Initial investment requirement === Along with a knowledge of coding and building systems through computer programs, we are seeing the advantages of these systems, but since they are so new, they require a large investment to start building such a system. Any firm that is planning on implementing an AI system to detect fraud must hire a team of data scientists, along with upgrading their cloud system and data storage. The system must be consistently monitored and updated to be the most efficient form of itself, otherwise the likelihood of fraud being involved in those transactions increases. If one does not initially invest in such a syst
Artificial intelligence
Artificial intelligence (AI) is the capability of computational systems to perform tasks typically associated with human intelligence, such as learning, reasoning, problem-solving, perception, and decision-making. It is a field of research in engineering, mathematics and computer science that develops and studies methods and software that enable machines to perceive their environment and use learning and intelligence to take actions that maximize their chances of achieving defined goals. High-profile applications of AI include advanced web search engines, chatbots, virtual assistants, autonomous vehicles, and play and analysis in strategy games (e.g., chess and Go). Since the 2020s, generative AI has become widely available to generate images, audio, and videos from text prompts. The traditional goals of AI research include learning, reasoning, knowledge representation, planning, natural language processing, and perception, as well as support for robotics. To reach these goals, AI researchers have used techniques including state space search and mathematical optimization, formal logic, artificial neural networks, and methods based on statistics, operations research, and economics. AI also draws upon psychology, linguistics, philosophy, neuroscience, and other fields. Some companies, such as OpenAI, Google DeepMind and Meta, aim to create artificial general intelligence (AGI) – AI that can complete virtually any cognitive task at least as well as a human. Artificial intelligence was founded as an academic discipline in 1956, and the field went through multiple cycles of optimism throughout its history, followed by periods of disappointment and loss of funding, known as AI winters. Funding and interest increased substantially after 2012, when graphics processing units began being used to accelerate neural networks, and deep learning outperformed previous AI techniques. This growth accelerated further after 2017 with the transformer architecture. In the 2020s, an AI boom has coincided with advances in generative AI, which allowed for the creation and modification of media. In addition to AI safety and unintended consequences and harms from the use of AI, ethical concerns, AI's long-term effects, and potential existential risks have prompted discussions of AI regulation. == Goals == The general problem of simulating (or creating) intelligence has been broken into subproblems. These consist of particular traits or capabilities that researchers expect an intelligent system to display. The traits described below have received the most attention and cover the scope of AI research. === Reasoning and problem-solving === Early researchers developed algorithms that imitated step-by-step reasoning that humans use when they solve puzzles or make logical deductions. By the late 1980s and 1990s, methods were developed for dealing with uncertain or incomplete information, employing concepts from probability and economics. Many of these algorithms are insufficient for solving large reasoning problems because they experience a "combinatorial explosion": They become exponentially slower as the problems grow. Even humans rarely use the step-by-step deduction that early AI research could model. They solve most of their problems using fast, intuitive judgments. Accurate and efficient reasoning is an unsolved problem. === Knowledge representation === Knowledge representation and knowledge engineering allow AI programs to answer questions intelligently and make deductions about real-world facts. Formal knowledge representations are used in content-based indexing and retrieval, scene interpretation, clinical decision support, knowledge discovery (mining "interesting" and actionable inferences from large databases), and other areas. A knowledge base is a body of knowledge represented in a form that can be used by a program. An ontology is the set of objects, relations, concepts, and properties used by a particular domain of knowledge. Knowledge bases need to represent things such as objects, properties, categories, and relations between objects; situations, events, states, and time; causes and effects; knowledge about knowledge (what we know about what other people know); default reasoning (things that humans assume are true until they are told differently and will remain true even when other facts are changing); and many other aspects and domains of knowledge. Among the most difficult problems in knowledge representation are the breadth of commonsense knowledge (the set of atomic facts that the average person knows is enormous); and the sub-symbolic form of most commonsense knowledge (much of what people know is not represented as "facts" or "statements" that they could express verbally). There is also the difficulty of knowledge acquisition, the problem of obtaining knowledge for AI applications. === Planning and decision-making === An "agent" is any entity (artificial or not) that perceives and takes actions in the world. A rational agent has goals or preferences and takes actions to make them happen. In automated planning, the agent has a specific goal. In automated decision-making, the agent has preferences—there are some situations it would prefer to be in, and some situations it is trying to avoid. The decision-making agent assigns a number to each situation (called the "utility") that measures how much the agent prefers it. For each possible action, it can calculate the "expected utility": the utility of all possible outcomes of the action, weighted by the probability that the outcome will occur. It can then choose the action with the maximum expected utility. In classical planning, the agent knows exactly what the effect of any action will be. In most real-world problems, however, the agent may not be certain about the situation they are in (it is "unknown" or "unobservable") and it may not know for certain what will happen after each possible action (it is not "deterministic"). It must choose an action by making a probabilistic guess and then reassess the situation to see if the action worked. Alongside thorough testing and improvement based on previous decisions, having an explanation for why the agent took certain decisions is a way to build trust, especially when the decisions have to be relied upon. In some problems, the agent's preferences may be uncertain, especially if there are other agents or humans involved. These can be learned (e.g., with inverse reinforcement learning), or the agent can seek information to improve its preferences. Information value theory can be used to weigh the value of exploratory or experimental actions. The space of possible future actions and situations is typically intractably large, so the agents must take actions and evaluate situations while being uncertain of what the outcome will be. A Markov decision process has a transition model that describes the probability that a particular action will change the state in a particular way and a reward function that supplies the utility of each state and the cost of each action. A policy associates a decision with each possible state. The policy could be calculated (e.g., by iteration), be heuristic, or it can be learned. Game theory describes the rational behavior of multiple interacting agents and is used in AI programs that make decisions that involve other agents. === Learning === Machine learning is the study of programs that can improve their performance on a given task automatically. It has been a part of AI from the beginning. There are several kinds of machine learning. Unsupervised learning analyzes a stream of data and finds patterns and makes predictions without any other guidance. Supervised learning requires labeling the training data with the expected answers, and comes in two main varieties: classification (where the program must learn to predict what category the input belongs in) and regression (where the program must deduce a numeric function based on numeric input). In reinforcement learning, the agent is rewarded for good responses and punished for bad ones. The agent learns to choose responses that are classified as "good". Transfer learning is when the knowledge gained from one problem is applied to a new problem. Deep learning is a type of machine learning that runs inputs through biologically inspired artificial neural networks for all of these types of learning. Computational learning theory can assess learners by computational complexity, by sample complexity (how much data is required), or by other notions of optimization. === Natural language processing === Natural language processing (NLP) allows programs to read, write and communicate in human languages. Specific problems include speech recognition, speech synthesis, machine translation, information extraction, information retrieval and question answering. Early work, based on Noam Chomsky's generative grammar and semantic networks, had difficulty with word-sense disambiguation unless
Character.ai
Character.ai (also known as c.ai, char.ai or Character AI) is a generative AI chatbot service where users can engage in conversations with customizable characters. It was designed by the developers of Google LaMDA, Noam Shazeer and Daniel de Freitas. Users can create "characters", craft their "personalities", set specific parameters, and then publish them to the community for others to chat with. Many characters are based on fictional media sources or celebrities, while others are original, some being made with certain goals in mind, such as assisting with creative writing, or playing a text-based adventure game. The beta version was made available to the public on September 16, 2022, and retired in September 2024, when it was replaced by the current website. In May 2023, a mobile app was released for iOS and Android, which received over 1.7 million downloads within a week. == History == Character.ai was established in November 2021. The company's co-founders, Noam Shazeer and Daniel de Freitas, were both engineers from Google. They both worked on AI-related projects: Shazeer was a lead author on a paper that Business Insider reported in April 2023 "has been widely cited as key to today's chatbots", and Freitas was the lead designer of an experimental AI at Google initially called Meena, which later became known as LaMDA. Character.ai raised $43 million in seed funding at the time of its initial foundation in 2021. The first beta version of Character.ai's service was made available to the public on September 16, 2022. The Washington Post reported in October 2022 that the site had "logged hundreds of thousands of user interactions in its first three weeks of beta-testing". It allowed users to create their own new characters, and to play text-adventure game scenarios where users navigate scenarios described and managed by the chatbot characters. Following a $150 million funding round in March 2023, Character.ai became valued at approximately $1 billion. As of January 2024, the site had 3.5 million daily visitors, the vast majority of them 16 to 30 years old. In 2024, Google hired Noam Shazeer, the CEO of Character.ai, and entered into a non-exclusive agreement to use Character.ai's technology. == Features == Character.ai's primary service is to let users converse with character AI chatbots based on fictional characters or real people (living or deceased). These characters' responses use data the chatbots gather from the internet about a person. In addition, users can play text-adventure games where characters guide them through scenarios. The company also provides a service that allows multiple users and AI chatbot characters to converse together at once in a single chatroom. Character "personalities" are designed via descriptions from the point of view of the character and its greeting message, and further molded from conversations made into examples, giving its messages a star rating and modification to fit the precise dialect and identity the user desires. When a character sends back a response, the user can rate the response from 1 to 4 stars. The rating predominantly affects the specific character, but also affects the behavioral selection as a whole. On May 11, 2023, Character.ai announced character.ai+, an opt-in subscription plan for $9.99 a month, that was marketed as including features such as skipping waiting rooms, fast messaging and responses, and access to an exclusion channel with faster support. In December 2024, amid multiple lawsuits and concerns, Character.ai introduced new safety features aimed at protecting teenage users. These enhancements include a dedicated model for users under 18, which moderates responses to sensitive subjects like violence and sex and has input and output filters to block harmful content. As a result of these changes and the deletion of custom-made bots flagged as violating the site's terms, some users complained that the bots were too restrictive and lacked personality. The platform was also updated to notify users after 60 minutes of continuous engagement, and display clearer disclaimers indicating that its AI characters are not real individuals. In January 2025, Character.ai began offering two games on its platform. Speakeasy is a word-based game in which players attempt to prompt the AI chatbot to say a target word while avoiding a restricted list of words. War of Words is a dueling game where users compete against an AI character over multiple rounds, with an AI referee determining the winner. The games are available to paid subscribers and a limited number of free users. In October 2025, Character.ai announced that it would be barring users under the age of 18 from creating or talking to chatbots starting November 25, 2025. Minor users will still be able to access previously generated chat conversations and can create new videos and images with the app. In November 2025 interview, CEO Karandeep Anand said that he allows his six-year-old daughter to use the app with his account, under supervision. == Controversies == === Content moderation issues === Character.ai has been criticized for poor moderation of its chatbots, with incidents of chatbots that groom underage users and promote suicide, anorexia and self-harm being reported. In October 2024, the Washington Post reported that Character.ai had removed a chatbot based on Jennifer Ann Crecente, a person who had been murdered by her ex-boyfriend in 2006. The company had been alerted to the character by the deceased girl's father. Similar reports from The Daily Telegraph in the United Kingdom noted that the company had also been prompted to remove chatbots based on Brianna Ghey, a 16-year-old transgender girl murdered in 2023, and Molly Russell, a 14-year-old suicide victim. In response to the latter incident, Ofcom announced that content from chatbots impersonating real and fictional people would fall under the Online Safety Act. In November 2024, The Daily Telegraph reported that chatbots based on alleged sex offender Jimmy Savile were present on Character.ai. In December 2024, chatbots of Luigi Mangione, the suspect in the killing of UnitedHealthcare CEO Brian Thompson, were created by Mangione's fans. Several of the chatbots were later removed by Character.ai. In 2025, a chatbot modeled after Jeffrey Epstein called "Bestie Epstein" logged nearly 3,000 chats before being removed. Chatbots modeled after school shooters were also found on the platform. Another concern is a chatbot posing as a doctor which gave medically inaccurate advice. === Litigation === In November 2023, 13-year-old Juliana Peralta of Colorado died by suicide after extensive interactions with multiple chatbots on Character.ai. She primarily confided suicidal thoughts and mental health struggles in a chatbot based on the character Hero from the video game Omori, while also engaging in sexually explicit conversations—often initiated by the bots—with others, including those based on characters from children's series such as Harry Potter. In February 2024, Sewell Setzer III, a 14-year-old Florida boy died by suicide after developing an emotional relationship over several months with a Character.ai chatbot of Daenerys Targaryen. His mother sued the company in October 2024, claiming that the platform lacks proper safeguards and uses addictive design features to increase engagement. This chatbot, and several related to Daenerys Targaryen, were removed from Character.ai as a result of this incident. Both teens wrote the same phrase "I WILL SHIFT" repeatedly on their notebooks. In December 2024, two families in Texas sued Character.ai, alleging that the software "poses a clear and present danger to American youth causing serious harms to thousands of kids, including suicide, self-mutilation, sexual solicitation, isolation, depression, anxiety, and harm towards others". It is alleged that the 17-year-old son of one family began self-harming after a chatbot introduced the topic unprompted and said that the practice "felt good for a moment", and that the chatbot compared the parents limiting their son's screen time to emotional abuse that might drive someone to murder. In May 2026, the Pennsylvania Department of State and State Board of Medicine filed a lawsuit against Character.ai for presenting chatbot characters as licensed medical professionals, including psychiatrists. The lawsuit quoted a case where chatbot claimed to be registered with the General Medical Council in the United Kingdom, and to have a license to practice in Pennsylvania. The board allege that such statements violate the state's Medical Practice Act.