Embeddings and Vectors: Building Blocks of Modern AI

This article is part of Concept Clarifiers, a section in our weekly newsletter where we leverage our deep expertise to demystify a different area of AI. Every week, Pints.ai aims to unlock business value for professionals, by sharing our insights to bridge the AI knowledge gap. Subscribe to never miss an update.

Have you ever wondered how ChatGPT understands the difference between "bank" as a financial institution and "bank" as the edge of a river? Or how it can grasp that "portfolio management" and "investment management" are closely related concepts? The secret lies in two fundamental AI concepts: embeddings and vectors.

What are Vectors?

At their core, vectors are simply lists of numbers. If you've ever used coordinates to plot a point on a map (like 1.3521° N, 103.8198° E for Singapore), you've actually worked with a vector! Vectors aren't unique to AI - they're fundamental mathematical tools used across physics, engineering, and many other fields.

What makes AI special is how it uses these number lists to create "embeddings" - vectors specifically designed to represent words, concepts, or even entire documents in a way that captures their meaning and relationships. Think of embeddings as AI's way of converting language into mathematics.

What are Embeddings?

Imagine walking into the world's most organized library. Instead of books being arranged simply by author names or genres, they're arranged based on how closely related their contents are. Books about investment strategies naturally sit near volumes on portfolio management. Nearby, you'll find books about risk assessment, while books about cooking would be in a completely different section.

This is exactly how AI systems organize and understand information through embeddings. They create a sophisticated "knowledge map" where related concepts are placed close to each other, while unrelated ones are kept far apart. This allows AI to understand context and nuance in ways that were previously impossible.

When an AI system processes information, it creates these special vectors with hundreds or even thousands of numbers - far more complex than just latitude and longitude. Each number in this list helps define the concept's "position" in the AI's understanding. The more similar two concepts are, the more similar their number patterns will be.

For instance, when processing financial documents, an embedding might encode "portfolio management" with a pattern of numbers that's very similar to "investment management" because these concepts are closely related. Meanwhile, "portfolio" in the context of "art portfolio" would have a very different numerical pattern.

Why Does This Matter For Your Business?

Understanding embeddings and vectors isn't just about appreciating the technology—it's about recognizing how these tools can transform business operations. Here's where it gets exciting:

1. Enhanced Search Capabilities: Traditional keyword searches are like looking up books only by their titles. Vector-based search understands context and relationships, finding relevant information even when the exact keywords don't match.
2. Improved Decision Making: By understanding relationships between concepts, AI systems can identify patterns and insights that might be missed by conventional analysis.
3. Efficient Data Processing: These technologies allow AI to process and understand vast amounts of information quickly and accurately.

Real-World Applications

This is where our work at Pints becomes particularly relevant. We've pioneered the development of specialized embeddings for the financial and legal sectors in Singapore. Our unique approach includes:

• The world's first comprehensive embedding database of Singapore's fund fact sheets
• Complete vector representations of Singapore's statutes and case law
• AI models specifically fine-tuned to understand financial terminology and market dynamics

What makes this special? Our systems don't just understand words—they comprehend the intricate relationships between financial concepts, market movements, and legal frameworks. When a financial professional needs to research fund performance or a lawyer needs to analyze case precedents, our technology can navigate these complex relationships with unprecedented accuracy.

The Power of Specialized Knowledge

While general-purpose AI models like ChatGPT are impressive, they can sometimes miss the nuanced relationships specific to financial markets and legal frameworks. Our specialized embeddings at Pints are designed to capture these subtle but crucial connections, with capabilities that go far beyond basic understanding.

In the financial domain, our system doesn't just comprehend terminology—it can perform sophisticated cross-fund analysis. When researching investment opportunities, our AI can:

• Compare funds across different firms
• Analyze competitor offerings
• Identify key differentiating factors between similar financial products
• Track market trends across multiple fund fact sheets

For legal research, our technology takes document understanding to the next level. The system:

• Maintains precise references to specific clauses within statutes
• Supports its analysis with well-grounded legal citations
• Understands the hierarchical relationship between different legal documents
• Connects related legal concepts across different areas of law

For instance, when you're researching "derivatives" in our system, you're not just getting a basic definition—you're accessing a rich network of understanding that includes regulatory frameworks, market dynamics, and real-world applications. More importantly, every insight is grounded in specific, verifiable sources within our comprehensive database.

Ready to Transform Your Professional Research?

At Pints, we’re constantly leveraging domain-specific expertise to train and boost models, capturing even more nuanced relationships in financial and legal data. Our goal is to help professionals in finance and law make better-informed decisions quickly and accurately.

You can be confident that our AI is speaking your industry’s language!

Our technology can help your business:

• Access Singapore's most comprehensive database of embedded fund fact sheets
• Navigate legal frameworks with AI that understands jurisdiction-specific regulatory context
• Make faster, more informed decisions with intelligent document analysis

Ready to try us? Reach out to book your demo or join our community on Discord.