Artificial intelligence (AI) refers to the simulation of human intelligence processes by computer systems. This encompasses a variety of capabilities including learning, reasoning, problem-solving, perception, language understanding, and even interaction with the environment. AI can be categorized into two main types: narrow AI, which is designed for specific tasks such as voice recognition and image analysis, and general AI, which possesses the ability to understand and reason across a wide range of subjects, similar to human cognitive abilities.

AI systems are built using algorithms and computational models that allow them to improve their performance over time as they are exposed to more data or experiences. Machine learning, a subset of AI, focuses on developing systems that can learn from data without being explicitly programmed for every possible outcome. Deep learning, often used for processing large sets of unstructured data, is a specific form of machine learning that utilizes neural networks to identify patterns and make decisions.

The applications of AI are vast and include areas such as healthcare, where it can assist in diagnosing diseases, finance for risk assessment and fraud detection, and customer service through chatbots that provide instant support. However, the rise of AI also brings ethical considerations, privacy concerns, and challenges related to bias and job displacement, making it a crucial topic of discussion in both technology and society today.