Saturday, January 24, 2026

Generative AI


Generative AI


“Generative AI, also known as gen AI, is a subset of artificial intelligence that can create original content such as text, images, videos, audio, or software code in response to user prompts. This technology relies on sophisticated machine learning models called deep learning models, which simulate the learning and decision-making processes of the human brain. These models identify and encode patterns and relationships in vast amounts of data, enabling them to understand natural language requests and generate relevant new content”. Gen AI gained mainstream popularity in 2022 with the launch of Chat GPT, which introduced a user-friendly interface in order to be able to “prompt” the model to get the desired output (text, image, video generation, etc).

Gen AI starts with foundation models, which is a deep learning algorithm trained in millions of data. The goal is to predict the output, for example the next word in a sentence or the next element in an image. We see clearly now what was discussed in previous articles: neural networks are used for predictions, and in this case the goal is to data. The reason that Gen AI achieved popularity only now is that the training requires thousands of GPUs (Graphic Processing Units) which require intensive computational power and millions of dollars! Once the model is trained, it must be tuned: that is refined for a specific content generation task. This can be done by fine tuning (e.g. nurturing the model with thousands of labeled examples with the desired output), or reinforcement learning with human feedback (which we have already discussed as the mathematician providing mathematical equations examples and giving reward or penalization depending on the answer). In a final step, the model is evaluated, which can give way to further training and tuning.

These models are referred to as Large Language Models, referring to their capacity to handle large amounts of data and that they are based on text. The big innovation came about in 2017 with the appearance of transformers in the paper “Attention is All You Need” by Vaswani and others. A transformer is a deep learning model architecture that processes sequences (like text or time series) using a mechanism called self-attention. This allows the model to understand the relationship between all elements in the sequence at once, rather than step-by-step. Transformers can analyze all parts of the input simultaneously and learn long-range relationships—making them more powerful and faster than older models like RNNs or LSTMs. This explains why GPT (Generative Pre-Trained models) had a breakthrough in recent years.

Another important concept is RAG (Retrieval Augmented Generation). Without it, an LLMs would only base it responses in its training data. But RAG pulls in information from a new data source (for example the internet), combining both it´s training data with external data creating better responses. Meaning the responses that we get are not only based on the data the model was trained on, but on the whole internet or external data we provide!

While previous models were rule-based, meaning for example you provided a set of predefined rules and expected an outcome; by predicting the next dataset Gen AI is able to generate new content. These models excel in the generation of text, audio, image, video, code, etc. Giving an example of text generation, Gen AI can provide you with a complete and thorough business plan for your new product, with a result surpassing a human!

Some of the applications for business include the following:

1)       Chatbot for customer support: remember in the 20th century when a real person answered each query that came about through media channels? This was costly and ineffective! A model can be trained with the most typical questions the users ask, and generate a response right away! If the customer is not satisfied, the intervention of a human can always be requested.

2)       Content Creation: Marketing agencies are using it to generate content, which can be automated and launched in a schedule.

3)       Content Summarization: remember when a lawyer would spend hours reading a contract? Large amounts of text or even video can be summarized to obtain the appropriate conclusions, reducing human error.

4)       Supply Chain Optimization: SAP has it´s own LLM, SAP Joule, which enables the creation of quotes, purchase request or purchase orders by a simple prompt. Hours saved in data processing!

5)       Predictive Analytics: the nature of prediction of the model enables forecast trends and customer behaviors which allow proactive management strategies.

Consider that, whereas training an LLM model is costly and time consuming, leveraging on existing LLMs to create your own AI-powered apps is cheaper than ever. The whole goal is not to reinvent the wheel, since the battle for LLMs is already fought by US and China. And even if some larger corporations have developed their own LLMs, the goal of this essay is to show you that in a post-industrial society knowledge replaces capital as the most expensive commodity. As an entrepreneur, don´t expect to create the next Chat GPT: use existing technology to leverage your AI-powered products and reach the market in a flash!

 

What is Generative AI? | IBM

What is a Transformer Model? | IBM

What is Generative AI? - GeeksforGeeks

Resource Allocation Graph (RAG) - GeeksforGeeks


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Generative AI

Generative AI “Generative AI, also known as gen AI, is a subset of artificial intelligence that can create original content such as text, ...