- By capability, AI is classified into Narrow AI (ANI), General AI (AGI), and Superintelligent AI (ASI). This classification helps define how intelligent and flexible the system is.
- By functionality, AI includes Reactive Machines, Limited Memory, Theory of Mind, and Self-Aware AI. This breakdown focuses on how AI systems behave and respond to input.
How Is Artificial Intelligence Categorized?
AI Categorization by Capability vs. Functionality
- By Capability: This method looks at the range and depth of intelligence an AI system can demonstrate. It includes three categories—Narrow AI (ANI), General AI (AGI), and Superintelligent AI (ASI). Each level reflects how closely the system resembles human thinking, learning, and problem-solving.
- By Functionality: This method explains how the AI behaves and responds based on data. It divides AI into four groups—Reactive Machines, Limited Memory, Theory of Mind, and Self-Aware AI. These types describe the system’s ability to remember, learn, and interact.
Difference Between Narrow, General, and Superintelligence
- Narrow AI (ANI) performs specific tasks and cannot operate beyond its design. It powers most of today’s applications like chatbots and translation tools.
- General AI (AGI) would be capable of doing any intellectual task that a human can do. This is still theoretical and under research.
- Superintelligent AI (ASI) would outperform humans in every possible field—from creativity to decision-making. It is a future concept with major ethical and safety discussions around it.
Reactive vs. Learning-Based AI Models
- Reactive AI systems do not learn. They respond to inputs with programmed outputs. An example is IBM Deep Blue, the chess-playing computer.
- Learning-based AI systems can improve from data. These models use techniques like machine learning and deep learning to adapt and evolve over time.
Overview of AI Taxonomy Used in Research
Leading institutions such as Stanford University, MIT, and OpenAI use both capability and functionality models to study AI. This dual approach helps in benchmarking developments, setting ethical guidelines, and forecasting future progress. It also supports course structures and practical learning paths in executive education programs like those offered by tryBusinessAgility.
What Are the 3 Main Types of AI Based on Capability?
What Is Narrow AI (ANI)?
- Definition: AI that is trained for a single task or a narrow range of tasks. It cannot transfer knowledge to unrelated domains.
Examples
- Voice assistants like Siri and Alexa
- Google Translate for language processing
- Email spam filters that detect unwanted messages
Limitations
- Cannot learn or apply knowledge outside its set domain
- No self-awareness or consciousness
- Cannot adapt to new tasks without reprogramming
What Is General AI (AGI)?
- Definition: AI that can perform any intellectual task that a human can do. It is not restricted to a single domain.
- Current Status: AGI does not exist yet. It is being researched by global labs and institutions, but remains theoretical.
Potential Use Cases
- Adaptive education systems that teach and learn dynamically
- Medical diagnosis across multiple specialisations
- Complex decision-making in real-time environments
Research Labs Working on AGI
- OpenAI
- DeepMind
- IBM Research
What Is Superintelligent AI (ASI)?
- Definition: AI that can perform any intellectual task that a human can do. It is not restricted to a single domain.
Capabilities
- High-level decision-making beyond human comprehension
- Creativity that exceeds artistic and scientific boundaries
- Emotional and social understanding on a deeper level
Risks and Concerns
- Potential loss of human control over machines
- Difficulty in aligning values between humans and AI
- Existential threats if safety is not built in from the beginning
Leading Theories
- Nick Bostrom’s “Intelligence Explosion” suggests that once AGI is achieved, it could rapidly self-improve and evolve into ASI.
What Are the 4 Types of AI Based on Functionality?
Reactive Machines
- Definition: Reactive AI systems are the most basic type of artificial intelligence. They do not store any past data and cannot learn from experience. They operate based on current inputs only.
Key Features
- No memory or data retention
- Predefined output for given input
- No learning or improvement over time
Example
- IBM Deep Blue, the chess-playing computer that beat world champion Garry Kasparov, is a classic example. It analyzed possible moves and responded based on pre-programmed strategies, without learning or adapting.
Capabilities
- Fast decision-making based on pattern recognition
- Best for static environments with fixed rules
Limited Memory AI
- Definition: Limited Memory AI systems can learn from past data and make decisions by using short-term memory. This is one of the most widely used forms of AI today.
Key Features
- Stores recent data temporarily
- Learns patterns and adapts within defined limits
- Capable of improving performance with feedback
Use Cases
- Fraud detection systems that use historical transaction data
- Autonomous vehicles that track recent speed, direction, and traffic inputs
Techniques Used
- Long Short-Term Memory (LSTM)
- Recurrent Neural Networks (RNNs)
- Decision Trees
Theory of Mind AI
- Definition: Theory of Mind AI refers to systems that aim to understand human emotions, intentions, and beliefs. These systems try to predict human behaviour by interpreting emotional and psychological signals.
Current Status
- Still in the early stages of development
- Focused mainly on research and experimental prototypes
Applications
- Human-machine interaction tools
- Social robotics designed to assist elderly or children
Self-Aware AI
- Definition: Self-Aware AI is a hypothetical type of AI that possesses consciousness, self-awareness, and emotional understanding. It would be capable of introspection and awareness of its own existence.
Current Status
- Does not exist
- Subject of philosophical debate and ethical discussions
Implications
- Raises legal and moral questions about machine rights
- Could redefine how humans and machines interact
How Do AI Types Differ in Their Capabilities?
Explanation of Differences
- Learning: Most modern AI systems, including Narrow AI and Limited Memory AI, are capable of learning. Reactive Machines cannot learn, while Theory of Mind and Self-Aware AI are still in research or conceptual stages.
- Memory Use: Reactive Machines work without memory. Limited Memory AI stores temporary data. AGI and Super AI would require long-term and highly advanced memory capabilities. Self-Aware AI, if ever built, would need conscious memory use.
- Autonomy: As AI becomes more advanced, its level of independence from human input increases. Narrow AI requires significant guidance, whereas AGI and Super AI would make decisions independently.
- Human-Like Behaviour: ANI lacks any human-like features. AGI aims to replicate human intelligence, and ASI would surpass it. Theory of Mind AI partially understands human emotions. Self-Aware AI would fully mimic human consciousness.
Which Type of AI Is Currently in Use?
Practical AI in Use
- Voice Assistants: Applications like Alexa, Siri, and Google Assistant use Narrow AI to understand commands and respond with pre-programmed outputs.
- Recommendation Engines: Platforms like Netflix, Amazon, and YouTube use machine learning to suggest products and content based on user behaviour. This involves Limited Memory AI models that learn from past user data.
- Chatbots and Virtual Agents: These systems use natural language processing to simulate conversation. They can answer queries, resolve basic issues, and guide users—commonly used in customer service and online help desks.
Edge AI
- Face recognition in smartphones
- Predictive maintenance in manufacturing machines
- Smart home automation systems
Machine Learning and Deep Learning Overlap
- Personalise experiences
- Detect anomalies
- Automate decisions
What Are the Ethical and Safety Concerns per AI Type?
Narrow AI (ANI)
Concerns
- Bias in Algorithms: AI can produce unfair outcomes if the data used for training is biased.
- Data Privacy: Personal information can be misused or exposed in applications like facial recognition or chatbots.
- Lack of Transparency: Many AI models operate as black boxes, where the logic behind decisions is not explained.
- Impact: These concerns affect consumer trust, regulatory compliance, and fairness in automated systems.
General AI (AGI)
Concerns
- Unpredictable Behaviour: An AGI system may interpret instructions in unexpected ways or make decisions beyond human understanding.
- Loss of Human Control: As AGI becomes more autonomous, human oversight becomes difficult.
- Job Displacement: AGI could automate skilled jobs, affecting employment in sectors like law, medicine, and education.
- Impact: AGI will require strong regulatory frameworks and alignment mechanisms to ensure it acts in line with human values.
Superintelligent AI (ASI)
Concerns
- Existential Risk: If ASI acts on goals misaligned with human values, it could become uncontrollable.
- Control Failure: Current safety protocols are inadequate for systems more intelligent than humans.
- Value Alignment: Aligning ASI’s actions with human ethics is a challenge still under research.
- Impact: The development of ASI demands extreme caution, global cooperation, and advanced safety mechanisms.
Theory of Mind AI
Concerns
- Consent and Emotional Manipulation: Machines interpreting emotions can raise questions of consent and personal boundaries.
- Social Impact: Over-reliance on emotionally responsive machines may reduce human interaction.
- Impact: This type requires ethical testing and guidelines for its use in healthcare, education, and elder care.
Self-Aware AI
Concerns
- Legal Identity: If an AI becomes self-aware, should it be granted rights or protections?
- Moral Status: Questions arise about its treatment, responsibilities, and societal role.
- Control and Boundaries: Defining limits for a conscious machine is a legal and ethical challenge.
- Impact: This type requires ethical testing and guidelines for its use in healthcare, education, and elder care.
Decision Trees and Random Forests
- Decision Trees split data into branches based on specific features. Each node represents a question, and each branch represents an answer. The process continues until a decision is made.
- Random Forests are collections of multiple decision trees. They improve accuracy by averaging the predictions of many trees, reducing the impact of errors from individual trees.
Support Vector Machines (SVMs)
Convolutional Neural Networks (CNNs)
Recurrent Neural Networks (RNNs)
Transformers (e.g., GPT, BERT)
Reinforcement Learning
- Q-Learning: Uses a table to store the value of actions in each state.
- Policy Gradients: Learn a policy directly to choose actions.
Reinforcement learning is used in robotics, gaming, and autonomous systems.
How Does AI Process and Analyse Data?
Data Ingestion and Preprocessing
- Removing duplicates and missing values
- Converting text to numerical format
- Normalising data ranges
- Formatting images or audio files
Feature Extraction and Selection
- Feature Extraction involves identifying relevant features from the raw data.
- Feature Selection involves choosing the most useful features to reduce noise and improve accuracy.
Model Training and Validation
Inference and Prediction Generation
- An AI system in healthcare may predict disease risk based on patient records.
- In e-commerce, the system may recommend products based on user history.
What Are Real-World Applications of AI?
Healthcare
- Diagnosing diseases using medical images, lab reports, and patient history
- Discovering new drugs through data-driven research models
- Monitoring patients remotely with wearable devices
- Automating administrative tasks such as medical records management
Finance
- Detecting fraud by identifying unusual transaction patterns
- Performing algorithmic trading to buy or sell stocks at optimal times
- Assessing credit risk using customer data
- Chatbots for 24/7 customer support in banking apps
Transportation
- Autonomous vehicles use AI for navigation, object detection, and decision-making
- Traffic management systems predict congestion and suggest alternative routes
- AI helps optimise logistics and delivery operations through route planning
Marketing
- Recommend products based on browsing and buying history
- Personalise content and offers for individual users
- Run targeted advertising campaigns using customer behaviour data
- Automate customer service using chatbots and virtual assistants
Manufacturing
- Predictive maintenance alerts engineers before machines break down
- Robotics and automation handle repetitive or hazardous tasks
- Quality control systems detect defects during production
Security
- Facial recognition systems identify individuals at access points
- AI models detect unusual behaviour or cyber threats in real time
- Surveillance systems use AI for monitoring and alert generation
What Technologies Enable AI to Work?
Hardware
- GPUs (Graphics Processing Units): GPUs are designed to perform multiple calculations in parallel. They are essential for training deep learning models, especially in image and video processing.
- TPUs (Tensor Processing Units): Developed by Google, TPUs are specialised chips that accelerate machine learning workloads. They are optimised for TensorFlow-based models.
- Edge Devices: These are hardware devices with AI capabilities embedded in them, such as smartphones, sensors, and industrial robots. Edge AI reduces latency by processing data locally instead of sending it to the cloud.
Software Frameworks
- TensorFlow: An open-source platform by Google, widely used for building deep learning models.
- PyTorch: A flexible and user-friendly framework developed by Meta. It is popular in research and production environments.
- Scikit-learn: A Python library for classical machine learning algorithms like decision trees, linear regression, and clustering.
Cloud Platforms
- AWS SageMaker: Amazon’s platform for developing and deploying machine learning models in the cloud.
- Google Vertex AI: A unified platform from Google Cloud that supports end-to-end AI development.
Data Infrastructure
- Data Lakes: Central repositories that store raw data in its native format. They support both structured and unstructured data.
- Data Pipelines: Systems that move data from sources to destinations, applying transformations along the way.
- ETL Tools (Extract, Transform, Load): These tools prepare data for analysis by cleaning, enriching, and loading it into storage systems.
What Are the Limitations and Challenges of AI?
Data Bias and Fairness
Explainability and Transparency
Energy Consumption and Scalability
Security Risks and Adversarial Attacks
Regulation and Ethical Concerns
- Use of AI in surveillance
- Job displacement due to automation
- Misuse of personal data
How Is AI Different from Human Intelligence?
Pattern Recognition vs Abstract Reasoning
Speed and Scale vs Creativity and Empathy
Consciousness and Generalisation Gaps
How Will AI Evolve in the Future?
Trends: AGI, Multimodal Models, Neurosymbolic AI
- Artificial General Intelligence (AGI): AGI aims to create machines that can understand, learn, and apply knowledge across a wide range of tasks—similar to human intelligence. It remains a long-term goal, with current research focused on building the foundations.
- Multimodal Models: These AI systems can process and understand data from multiple sources such as text, images, audio, and video at the same time. This helps improve context-awareness and accuracy. For example, a multimodal system could analyse a video interview by processing spoken words, facial expressions, and background context together.
- Neurosymbolic AI: Combines deep learning (neural networks) with symbolic reasoning (logic-based systems). This hybrid approach aims to improve learning efficiency and provide better explainability. It is being explored in areas like knowledge graphs, automated reasoning, and decision support.
Human-AI Collaboration
- AI co-pilots for software development and data analysis
- AI-powered decision support in healthcare and finance
- Smart assistants that help with scheduling, documentation, and research
Regulation and Responsible Development
- Stricter data privacy and usage laws
- Standards for AI explainability and fairness
- Cross-border agreements on AI safety and accountability
FAQs
What is Artificial Intelligence and how does it work?
What are the top Artificial Intelligence courses available in India?
tryBusinessAgility offers AI-focused executive education programs that include:
- Certified Artificial Intelligence Foundations
- AI Product Mastery
- AI and Digital Transformation Strategist
These programs are suitable for working professionals, business leaders, and technical experts looking to build future-ready skills in AI.
Which industries are using AI widely in India?
AI is used across multiple sectors in India, such as:
Healthcare (medical diagnostics, patient monitoring)
Banking and Finance (fraud detection, credit scoring)
Manufacturing (automation, predictive maintenance)
E-commerce (product recommendations, customer support)
Transportation (route planning, autonomous systems)

