Artificial Intelligence Vs. Machine Learning: What’s the Difference and Why Do They Matter?

Key takeaways

• AI and machine learning have dominated headlines over the last few months
• Artificial intelligence is an umbrella term, whereas machine learning is a sub-discipline of AI
• Microsoft, Google and Nvidia are some of the big AI winners on the markets in 2023

AI this, machine learning that — you’d be hard-pressed to find a financial headline that didn’t extol their virtues (not to mention the impact on the stock market). But what exactly is the difference between artificial intelligence and machine learning?

We’ve got a quick explainer below and a look at the companies that have hit it big on the markets this year thanks to the exciting new technology.

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What’s the difference between AI and machine learning?

Artificial intelligence is an umbrella term for computer science around making machines behave like humans. Some of the AI models used to achieve this can focus on understanding natural human language, solving problems and making decisions.

Machine learning is a subset of artificial intelligence that trains algorithms to make decisions based on the data it’s fed. Instead of programming rules for every scenario, the machine learning model is given the information and learns the rules itself.

ChatGPT is an example of machine learning, as it runs on a large language model (LLM), as are all of the buzzy new AI tools you’ve been hearing about this year. We’re still a way off from achieving true artificial intelligence.

AI’s effect on the stock market in 2023

Since the dawn of ChatGPT late last year, the AI explosion has sent the tech marker into a frenzy. Microsoft upped the stakes with a $10 billion investment into OpenAI, the creator of ChatGPT. Soon after, Google announced it was releasing an AI chatbot competitor and integrating the tech into a brand-new search engine.

These two companies have reaped the rewards from Wall Street. So far this year, Microsoft’s share price has risen 40% in value to hit $336, while Google stock has climbed 47% in the same period.

Arguably, the biggest winner from the AI buzz this year is computer chip maker Nvidia. After announcing a string of hardware, software and partnerships to support AI for enterprise clients, Nvidia’s share price has climbed a whopping 224% in 2023 and became the first chip company to reach a trillion-dollar valuation.

The bottom line

While true AI is some way off from being developed, machine learning is already helping transform work and play. It’s no wonder investors are excited about the profit potential once Big Tech starts monetizing its AI tools and products.

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