An Example of AI in Action

Skin Cancer Diagnosis Using AI

Let us illustrate some unique qualities and benefits of AI with an example.

Could a machine distinguish skin cancer from a benign skin condition—acne, a rash, or a mole—by simply scanning a photograph? Can a machine do it as accurately as an expert dermatologist, or even better? A research group at the Stanford University set out to find out the answers.

Computer scientists at Stanford have created an AI diagnosis algorithm for skin cancer.

Stanford researchers started with an existing deep learning algorithm for AI built by Google for image classification. Just like any dermatologist, an AI system has to be trained to become accurate at diagnosing skin cancer. In order to do this the Stanford researchers used a “teaching-set” of 13,000 validated image samples spanning 2,032 different diseases, where each image had been diagnosed and thus categorized by dermatologists as benign lesions, malignant lesions, or non-cancerous growths. The deep neural network of the AI system then scanned these images pixel by pixel, looking for the characteristics common to each diagnosis. The AI system learned to diagnose these images and compared its diagnosis with the “correct” answer provided by the dermatologists. Subsequently, then, based on how accurate it was, the AI system tuned itself with every sample to improve its accuracy for the next diagnosis. After iteratively learning by comparing its diagnosis with that diagnosed by dermatologists through the vast number of images, its diagnosis became as accurate as the best dermatologists. In a side-by-side comparison, using 2000 gold standard test set of images, the AI system outperformed expert dermatologists.

The training and tests were done with high-quality images. With this said, more work needs to be done to make the system work with images taken with a smartphone and via the Internet for the diagnosis. Skin cancer diagnosis done by AI system with smartphone images could have an immense impact on the cost savings and value for patients and cost savings. Each year, some 5.4 million new cases of skin cancer are diagnosed in the United States. The usual process for identifying the many varieties of the disease involve a visual examination of moles or other marks on the skin by a dermatologist. In cases of doubt, a biopsy is needed. Early detection greatly increases the chances of survival – a five-year survival rate for melanoma detected early on is around 97 percent; but when detected in its later stages, that figure falls to around 14 percent.

This example illustrates the power of using AI for medical diagnosis. The use of images and patterns is very common in monitoring and diagnosis of many diseases. A well trained deep learning AI is excellent at extracting information from images, videos and patterns to accurately make the right decisions. A number of companies are very active in using AI for diagnosis. IBM Watson, an IBM supercomputer that combines artificial intelligence (AI) and sophisticated analytical software for optimal performance as a “question answering” machine, has made major progress with AI in diagnosing cancer and health disorders. We believe that AI will play a significant role in medical diagnosis for a wide range of diseases – lowering cost, reducing the time to detect, and saving lives.

Some Clarification Upfront

We would like to clarify a few points upfront:

  • Most AI applications today, and in the very near future, apply to narrow and specific areas like recognizing objects in an image, speech recognition and text translation. In contrast, human intelligence applies to a very vast area. AI technology will take several decades to achieve the breadth and depth of human intelligence.
  • AI today is not perfect and cannot deliver 100% error-free outputs. As we all know, nothing is error free, not even human predictions and decisions. However, the performance of (narrow) AI systems is superior and more accurate than that of us normal people, making it attractive in many applications. In the initial phase of deployment, AI decisions will be applied as expert opinions or guidance. Final decision to take action can still be taken under human supervision following the AI recommendation. At some point in the future, when a high trust in AI decision is established, the human approval will most likely be seen as redundant and dropped.
  • In assessing errors and mistakes in performance, we are much more tolerant to mistakes made by humans, caused by forgetfulness, being tired, being distracted, falling asleep etc. However, we expect AI machines to be perfect and error-free. Eventually we will recognize that machines make far fewer mistakes than an average human, are cheaper, and easier to maintain. That will tip the balance in favor of AI solutions.
  • Every technology can be used and abused. AI delivers significant benefits and innovations for almost all industries. However, we are aware that a powerful technology like AI can also be used to do harm. Science fiction often paints many negative scenarios of how AI will dominate the world, exploiting and subjugating humans to menial and degrading roles. Much more concerning is the imminent issue of job displacement, retraining, and unemployment of those who lose jobs to AI and robots in the very near future. As a consequence and number of other problems can arise, like growing inequality, social tensions, and geopolitical shifts. Unfortunately, at the time of writing, we have not come across any satisfying solutions for these issues.

The first section of this book focuses on making AI understandable, providing an easy to understand background on some fundamental questions: What is AI? What does it really do? How does it work? How did it evolve? How can machines be made intelligent? How do they learn? How does it fit with other digital technologies? What makes it useful in business?

The second section is focused on putting AI into action for your business – in an evolutionary as well as in a disruptive fashion. By using a few case studies we illustrate how AI is being used to create customer and business value. What skills and competencies are needed, how to develop or acquire them, and how to integrate AI into a product or process? We explore some issues like the role of humans in the future of collaborative work with AI, the future of work in the society, and the social consequences of the AI revolution. Lastly, we seek to address the outlook – what is the end game and where are we heading?

Artificial Intelligence – the Next Big Thing

AI is projected to have a disruptive and transformational impact on businesses and industries. Unlike standard computers, AI systems have the ability to learn from historical cases, tuning themselves with every case to improve their accuracy in making better predictions and decisions. Like us humans, they can learn from experience. Initially, AI’s most valuable and largest contribution will come from its ability to automate decision-making from provided inputs e.g. automatically and accurately determining all objects in a given image, or figuring out if an insurance claim is a fraud. Making better decisions is the key to success and AI can decrease the cost of making better decisions in many situations. This is likely to have a major impact on the way products and services are being designed, manufactured and sold. It will create new jobs and opportunities, but also make many traditional ones obsolete thus transforming industries and lifestyles.

Through this book, we are sharing our insights on what AI is, how it works, and what it can do for you. Our focus is on simplification of key concepts and articulating the unique benefits of AI. Since AI offers very significant opportunities to innovate, we wish to motivate you to start applying it in the development of your upcoming products, services, and business processes.

What is This Book About?

A number of large companies like Google, Amazon, Facebook, Apple, IBM, Microsoft, Tesla, Alibaba, Tencent, Baidu, together with 1000s of innovative startups worldwide, are working tirelessly to develop the potential of AI and to offer the resulting benefits to businesses and customers. Their work is off the back of many years of groundbreaking AI research in universities and institutions around the world. Its progress and disruptive power is already, evident in a number of areas, from asking Siri to ?send a message to your spouse to autonomous driving. AI is radically transforming speech recognition, translation, spam mail detection, healthcare, and autonomous vehicles. AI is inevitable and will very soon become mainstream. The use of AI for future competitiveness and survival is becoming a must. Building AI focused products and services can and must start now. Those companies that took early advantage of digital technologies?—?like Sony cameras?—?have thrived, and those which did not?—?like Kodak?—?have perished. For most traditional businesses, developing and finalizing a robust business value proposition and a business model based on a new opportunity like AI is a challenging and difficult process. It often requires bold decision-making from top-level management since a number of organizational changes and Change Management are needed to transform a company from the status quo to one that is prepared for the future with a new business model based on new technologies.

Why Write This Book?

Our Goal: Demystify AI and Enable its Adoption for Business

AI is arguably one of the most popular technology topics of our time. Open a newspaper, switch on your television, it is a topic flooding every medium from popular to technical to social and political. It captivates the imagination, fantasies, and emotions of all. In spite of so much information, there is a need for clarity around the name and basic concepts of AI, possibly due to the ambiguity raised by media hype, differing definitions, technical jargon, and outrageous projections by science fiction. Our objective for writing this book is to demystify AI and its use so that it is understandable for a wide audience. We believe that with AI, industries and businesses have a tremendous opportunity to innovate, differentiate and deliver unique customer benefits.


As a child, I loved being called intelligent. It made me feel recognized as someone who could do wonders. Intelligence has always been seen as a uniquely human characteristic – a differentiating asset that sets us apart from all other animals. At times, we are generously willing to include certain animals like dolphins, chimpanzees, and dogs as intelligent. However, until recently, we have not regarded a machine as intelligent. We associate the word intelligence with our unique ability to learn, make decisions, and solve complex problems. We know from our experience that intelligent people are valued for their creative problem solving expertise and paid top salaries in most organizations.

Just a few short years ago, artificially created intelligence was regarded as impossible but today it is dramatically altering our lives. If intelligence can be artificially created then what has changed? During the industrial revolution, machines were invented to outsource human (and animal) physical and muscular power so that we humans were relieved of physical labor. Will artificially intelligent machines relieve humans in our thinking and decision-making capacity – to what extent and in what areas? What does it mean for individuals, our society, and future? These are intriguing and challenging questions with answers that are even more fascinating.

We believe that Artificial Intelligence (AI) is the most profound innovation by humans, with a far deeper and wider impact on our lives, than all preceding innovations from the steam engine of 1712 to the Internet. AI has the potential to transform the very role of humans in our society. As a result, it is extremely important for everyone, especially for business decision makers, to understand the power, significance, and relevance that AI will have not only on our lives but also on business and society as a whole.