What does AI-Driven, AI-Powered, etc. Really Mean?

I was recently doing some product research and came across a company promising “AI-powered RFM analysis”.? After reading carefully through a pretty detailed description of their offering, it is unclear what contribution AI is making – RFM analysis is pretty cut-and-dried, the most traditional approach involves creating five splits along three dimensions.? Does putting “AI-powered” in front of the name suddenly turbo-charge the output?? Unlikely.? Is it there to sway potential buyers with how cutting-edge this approach must be?? Probably, but would only work for the low-information buyer.? In this case, it actually meant that once you had slotted a customer into an RFM bucket, you could utilize a recommendation engine to suggest next likely product.? So… the RFM part isn’t really “AI-powered”.?

It got me thinking.? Maybe I’m late to the table on this, but I don’t seem to be alone. I’ve been in numerous recent conversations where terms like AI-driven, AI-powered, and the like, were being thrown around interchangeably.? And I started to realize I wasn’t really differentiating, and maybe others aren’t either.? After all, we’ve all become experts on AI in just the past couple of years, right?? But there has to be a distinction, so it was time to do a little digging to educate myself so I could share with others.

I start by looking back to 2019 – the dark ages in AI time, apparently! – when HBR published an article entitled “Building the AI-Powered Organization” (https://hbr.org/2019/07/building-the-ai-powered-organization).? They were ahead of their time, because Gen AI wasn’t even a thing for most people outside of the research community.? A few quotes stand out upon a re-read:

“One of the biggest mistakes leaders make is to view AI as a plug-and-play technology with immediate returns.”

“While cutting-edge technology and talent are certainly needed, it’s equally important to align a company’s culture, structure, and ways of working to support broad AI adoption.”

“Most AI transformations take 18 to 36 months to complete, with some taking as long as five years.”

But in the entire article, the authors never define “AI-powered”.?

So I look elsewhere… and find a really interesting perspective provided even further back, in 2018 (: https://www.eriktrautman.com/posts/what-it-means-to-be-ai-driven) that introduces some additional terms to consider:

There are three levels at which an organization can adopt artificial intelligence:

• AI-Assisted: AI is a technical bolt-on to existing processes, usually through the use of AI-created tools, for example AI assisted sales or team management tools.
• AI-Enabled / AI-Augmented: AI is applied to existing processes or product data to make the product or service better or more useful, for example the recommendation engines behind Netflix, Spotify, Amazon, etc. This is often in the form of one or more AI-driven features or products.
• AI-Driven: AI is literally the lifesblood of the company or initiative, for example self-driving technologies and the companies providing tools to AI-Assisted companies.

And you can always look to Quora (https://www.quora.com/What-does-AI-driven-mean ?and https://www.quora.com/What-is-AI-powered) to provide definitions:

"AI-driven" refers to something that is powered or guided by artificial intelligence (AI) technologies. It implies that AI algorithms, systems, or processes play a significant role in the functioning, decision-making, or behavior of a particular product, service, or system… For example:

o?? An "AI-driven chatbot" implies that artificial intelligence technologies are used to enable and enhance the capabilities of the chatbot, allowing it to understand and respond to user queries in a more intelligent and context-aware manner.

o?? An "AI-driven recommendation system" suggests that artificial intelligence algorithms analyze user preferences and behaviors to provide personalized recommendations, such as in content streaming services or e-commerce platforms.

One contributor, in 2021, says:

“What is AI Powered?” Answer: Malarkey.? AI refers to a broad range of heterogeneous technologies that weakly replicate some of the things people can do, at least in theory. Something that’s “AI Powered” contains some AI technologies. How much? Unspecified. Providing what specific capabilities? How valuable? Who knows?...

What are the necessary and sufficient conditions for something to considered “AI Powered?” There is no consensus on the meaning of this term.

A more recent post by a European consultant (https://www.fintechstartuppartners.com/definitions/what-is-the-difference-between-ai-powered-and-ai-driven/) seems to provide additional clarity:

AI-powered simply means that an organization and people is enabled or enhanced by artificial intelligence… AI-driven, on the other hand, means that AI is the primary force behind a technology or process.

However, this is clearly not a consensus view, as a few months later a blog post provides a definition that doesn’t quite agree (https://subscribed.fyi/blog/definition-and-significance-of-ai-powered/):

In the realm of modern technology, the term “AI-powered” refers to the integration of Artificial Intelligence (AI) capabilities into software, applications, or systems... When a solution is labeled as AI-powered, it implies that it leverages advanced algorithms, machine learning, and other AI techniques to enhance its functionality, adapt to data inputs, and improve performance over time.

The first author views AI-powered as referring to organization and people, and AI-driven relating to technologies.? The second author views AI-powered as referring to technology.? There is still no consensus, although I suspect more people align with the former view.

After sifting through all of this and looking at additional sources, and thinking about how these terms really apply in my area of marketing analytics, I think I would settle on the following:

AI-enabled means a technological tool for which AI serves as a minor component or input.? An example would be a simple regression model, written in Python, which incorporates calls to an AI library.

AI-powered means a technological tool for which AI serves as the driving force.? An example would be a self-driving car.

AI-driven refers to an organization or process which is centered around the use of AI.? An example would be Microsoft, which is re-focusing all of its efforts to center them around AI and incorporating it not only in existing products, but the future direction of the company.

Going back to my example at the beginning - according to this framework, do I think they are truly offering “AI-powered RFM”?? No.? They’re offering traditional RFM analysis with an AI-enabled recommendation engine bolted on.

More importantly, this exercise suggests that I will have to be precise in how I describe my own firm’s offerings going forward.