How do machine learning professionals make data readable and accessible? What techniques do they use to dissect raw information?

One of these techniques is clustering. Data clustering is the process of grouping items in a data set together. These items are related, allowing key stakeholders to make critical strategic decisions using the insights.

After preparing data, which is what specialists do 50%-80% of the time, clustering takes center stage. It forms structures other members of the company can understand more easily, even if they lack advanced technical knowledge.

Clustering in machine learning involves many techniques to help accomplish this goal. Here is a detailed overview of those techniques.

Clustering Techniques

Data science is an ever-changing field with lots of variables and fluctuations. However, one thing’s for sure – whether you want to practice clustering in data mining or clustering in machine learning, you can use a wide array of tools to automate your efforts.

Partitioning Methods

The first groups of techniques are the so-called partitioning methods. There are three main sub-types of this model.

K-Means Clustering

K-means clustering is an effective yet straightforward clustering system. To execute this technique, you need to assign clusters in your data sets. From there, define your number K, which tells the program how many centroids (“coordinates” representing the center of your clusters) you need. The machine then recognizes your K and categorizes data points to nearby clusters.

You can look at K-means clustering like finding the center of a triangle. Zeroing in on the center lets you divide the triangle into several areas, allowing you to make additional calculations.

And the name K-means clustering is pretty self-explanatory. It refers to finding the median value of your clusters – centroids.

K-Medoids Clustering

K-means clustering is useful but is prone to so-called “outlier data.” This information is different from other data points and can merge with others. Data miners need a reliable way to deal with this issue.

Enter K-medoids clustering.

It’s similar to K-means clustering, but just like planes overcome gravity, so does K-medoids clustering overcome outliers. It utilizes “medoids” as the reference points – which contain maximum similarities with other data points in your cluster. As a result, no outliers interfere with relevant data points, making this one of the most dependable clustering techniques in data mining.

Fuzzy C-Means Clustering

Fuzzy C-means clustering is all about calculating the distance from the median point to individual data points. If a data point is near the cluster centroid, it’s relevant to the goal you want to accomplish with your data mining. The farther you go from this point, the farther you move the goalpost and decrease relevance.

Hierarchical Methods

Some forms of clustering in machine learning are like textbooks – similar topics are grouped in a chapter and are different from topics in other chapters. That’s precisely what hierarchical clustering aims to accomplish. You can the following methods to create data hierarchies.

Agglomerative Clustering

Agglomerative clustering is one of the simplest forms of hierarchical clustering. It divides your data set into several clusters, making sure data points are similar to other points in the same cluster. By grouping them, you can see the differences between individual clusters.

Before the execution, each data point is a full-fledged cluster. The technique helps you form more clusters, making this a bottom-up strategy.

Divisive Clustering

Divisive clustering lies on the other end of the hierarchical spectrum. Here, you start with just one cluster and create more as you move through your data set. This top-down approach produces as many clusters as necessary until you achieve the requested number of partitions.

Density-Based Methods

Birds of a feather flock together. That’s the basic premise of density-based methods. Data points that are close to each other form high-density clusters, indicating their cohesiveness. The two primary density-based methods of clustering in data mining are DBSCAN and OPTICS.

DBSCAN (Density-Based Spatial Clustering of Applications With Noise)

Related data groups are close to each other, forming high-density areas in your data sets. The DBSCAN method picks up on these areas and groups information accordingly.

OPTICS (Ordering Points to Identify the Clustering Structure)

The OPTICS technique is like DBSCAN, grouping data points according to their density. The only major difference is that OPTICS can identify varying densities in larger groups.

Grid-Based Methods

You can see grids on practically every corner. They can easily be found in your house or your car. They’re also prevalent in clustering.

STING (Statistical Information Grid)

The STING grid method divides a data point into rectangular grills. Afterward, you determine certain parameters for your cells to categorize information.

CLIQUE (Clustering in QUEst)

Agglomerative clustering isn’t the only bottom-up clustering method on our list. There’s also the CLIQUE technique. It detects clusters in your environment and combines them according to your parameters.

Model-Based Methods

Different clustering techniques have different assumptions. The assumption of model-based methods is that a model generates specific data points. Several such models are used here.

Gaussian Mixture Models (GMM)

The aim of Gaussian mixture models is to identify so-called Gaussian distributions. Each distribution is a cluster, and any information within a distribution is related.

Hidden Markov Models (HMM)

Most people use HMM to determine the probability of certain outcomes. Once they calculate the probability, they can figure out the distance between individual data points for clustering purposes.

Spectral Clustering

If you often deal with information organized in graphs, spectral clustering can be your best friend. It finds related groups of notes according to linked edges.

Comparison of Clustering Techniques

It’s hard to say that one algorithm is superior to another because each has a specific purpose. Nevertheless, some clustering techniques might be especially useful in particular contexts:

  • OPTICS beats DBSCAN when clustering data points with different densities.
  • K-means outperforms divisive clustering when you wish to reduce the distance between a data point and a cluster.
  • Spectral clustering is easier to implement than the STING and CLIQUE methods.

Cluster Analysis

You can’t put your feet up after clustering information. The next step is to analyze the groups to extract meaningful information.

Importance of Cluster Analysis in Data Mining

The importance of clustering in data mining can be compared to the importance of sunlight in tree growth. You can’t get valuable insights without analyzing your clusters. In turn, stakeholders wouldn’t be able to make critical decisions about improving their marketing efforts, target audience, and other key aspects.

Steps in Cluster Analysis

Just like the production of cars consists of many steps (e.g., assembling the engine, making the chassis, painting, etc.), cluster analysis is a multi-stage process:

Data Preprocessing

Noise and other issues plague raw information. Data preprocessing solves this issue by making data more understandable.

Feature Selection

You zero in on specific features of a cluster to identify those clusters more easily. Plus, feature selection allows you to store information in a smaller space.

Clustering Algorithm Selection

Choosing the right clustering algorithm is critical. You need to ensure your algorithm is compatible with the end result you wish to achieve. The best way to do so is to determine how you want to establish the relatedness of the information (e.g., determining median distances or densities).

Cluster Validation

In addition to making your data points easily digestible, you also need to verify whether your clustering process is legit. That’s where cluster validation comes in.

Cluster Validation Techniques

There are three main cluster validation techniques when performing clustering in machine learning:

Internal Validation

Internal validation evaluates your clustering based on internal information.

External Validation

External validation assesses a clustering process by referencing external data.

Relative Validation

You can vary your number of clusters or other parameters to evaluate your clustering. This procedure is known as relative validation.

Applications of Clustering in Data Mining

Clustering may sound a bit abstract, but it has numerous applications in data mining.

  • Customer Segmentation – This is the most obvious application of clustering. You can group customers according to different factors, like age and interests, for better targeting.
  • Anomaly Detection – Detecting anomalies or outliers is essential for many industries, such as healthcare.
  • Image Segmentation – You use data clustering if you want to recognize a certain object in an image.
  • Document Clustering – Organizing documents is effortless with document clustering.
  • Bioinformatics and Gene Expression Analysis – Grouping related genes together is relatively simple with data clustering.

Challenges and Future Directions

  • Scalability – One of the biggest challenges of data clustering is expected to be applying the process to larger datasets. Addressing this problem is essential in a world with ever-increasing amounts of information.
  • Handling High-Dimensional Data – Future systems may be able to cluster data with thousands of dimensions.
  • Dealing with Noise and Outliers – Specialists hope to enhance the ability of their clustering systems to reduce noise and lessen the influence of outliers.
  • Dynamic Data and Evolving Clusters – Updates can change entire clusters. Professionals will need to adapt to this environment to retain efficiency.

Elevate Your Data Mining Knowledge

There are a vast number of techniques for clustering in machine learning. From centroid-based solutions to density-focused approaches, you can take many directions when grouping data.

Mastering them is essential for any data miner, as they provide insights into crucial information. On top of that, the data science industry is expected to hit nearly $26 billion by 2026, which is why clustering will become even more prevalent.

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Sage: The ethics of AI: how to ensure your firm is fair and transparent
OPIT - Open Institute of Technology
OPIT - Open Institute of Technology
Mar 7, 2025 3 min read

Source:


By Chris Torney

Artificial intelligence (AI) and machine learning have the potential to offer significant benefits and opportunities to businesses, from greater efficiency and productivity to transformational insights into customer behaviour and business performance. But it is vital that firms take into account a number of ethical considerations when incorporating this technology into their business operations. 

The adoption of AI is still in its infancy and, in many countries, there are few clear rules governing how companies should utilise the technology. However, experts say that firms of all sizes, from small and medium-sized businesses (SMBs) to international corporations, need to ensure their implementation of AI-based solutions is as fair and transparent as possible. Failure to do so can harm relationships with customers and employees, and risks causing serious reputational damage as well as loss of trust.

What are the main ethical considerations around AI?

According to Pierluigi Casale, professor in AI at the Open Institute of Technology, the adoption of AI brings serious ethical considerations that have the potential to affect employees, customers and suppliers. “Fairness, transparency, privacy, accountability, and workforce impact are at the core of these challenges,” Casale explains. “Bias remains one of AI’s biggest risks: models trained on historical data can reinforce discrimination, and this can influence hiring, lending and decision-making.”

Part of the problem, he adds, is that many AI systems operate as ‘black boxes’, which makes their decision-making process hard to understand or interpret. “Without clear explanations, customers may struggle to trust AI-driven services; for example, employees may feel unfairly assessed when AI is used for performance reviews.”

Casale points out that data privacy is another major concern. “AI relies on vast datasets, increasing the risk of breaches or misuse,” he says. “All companies operating in Europe must comply with regulations such as GDPR and the AI Act, ensuring responsible data handling to protect customers and employees.”

A third significant ethical consideration is the potential impact of AI and automation on current workforces. Businesses may need to think about their responsibilities in terms of employees who are displaced by technology, for example by introducing training programmes that will help them make the transition into new roles.

Olivia Gambelin, an AI ethicist and the founder of advisory network Ethical Intelligence, says the AI-related ethical considerations are likely to be specific to each business and the way it plans to use the technology. “It really does depend on the context,” she explains. “You’re not going to find a magical checklist of five things to consider on Google: you actually have to do the work, to understand what you are building.”

This means business leaders need to work out how their organisation’s use of AI is going to impact the people – the customers and employees – that come into contact with it, Gambelin says. “Being an AI-enabled company means nothing if your employees are unhappy and fearful of their jobs, and being an AI-enabled service provider means nothing if it’s not actually connecting with your customers.”

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Reuters: EFG Watch: DeepSeek poses deep questions about how AI will develop
OPIT - Open Institute of Technology
OPIT - Open Institute of Technology
Feb 10, 2025 4 min read

Source:

  • Reuters, Published on February 10th, 2025.

By Mike Scott

Summary

  • DeepSeek challenges assumptions about AI market and raises new ESG and investment risks
  • Efficiency gains significant – similar results being achieved with less computing power
  • Disruption fuels doubts over Big Tech’s long-term AI leadership and market valuations
  • China’s lean AI model also casts doubt on costly U.S.-backed Stargate project
  • Analysts see DeepSeek as a counter to U.S. tariffs, intensifying geopolitical tensions

February 10 – The launch by Chinese company DeepSeek, opens new tab of its R1 reasoning model last month caused chaos in U.S. markets. At the same time, it shone a spotlight on a host of new risks and challenged market assumptions about how AI will develop.

The shock has since been overshadowed by President Trump’s tariff wars, opens new tab, but DeepSeek is set to have lasting and significant implications, observers say. It is also a timely reminder of why companies and investors need to consider ESG risks, and other factors such as geopolitics, in their investment strategies.

“The DeepSeek saga is a fascinating inflection point in AI’s trajectory, raising ESG questions that extend beyond energy and market concentration,” Peter Huang, co-founder of Openware AI, said in an emailed response to questions.

DeepSeek put the cat among the pigeons by announcing that it had developed its model for around $6 million, a thousandth of the cost of some other AI models, while also using far fewer chips and much less energy.

Camden Woollven, group head of AI product marketing at IT governance and compliance group GRC International, said in an email that “smaller companies and developers who couldn’t compete before can now get in the game …. It’s like we’re seeing a democratisation of AI development. And the efficiency gains are significant as they’re achieving similar results with much less computing power, which has huge implications for both costs and environmental impact.”

The impact on AI stocks and companies associated with the sector was severe. Chipmaker Nvidia lost almost $600 billion in market capitalisation after the DeepSeek announcement on fears that demand for its chips would be lower, but there was also a 20-30% drop in some energy stocks, said Stephen Deadman, UK associate partner at consultancy Sia.

As Reuters reported, power producers were among the biggest winners in the S&P 500 last year, buoyed by expectations of ballooning demand from data centres to scale artificial intelligence technologies, yet they saw the biggest-ever one-day drops after the DeepSeek announcement.

One reason for the massive sell-off was the timing – no-one was expecting such a breakthrough, nor for it to come from China. But DeepSeek also upended the prevailing narrative of how AI would develop, and who the winners would be.

Tom Vazdar, professor of cybersecurity and AI at Open Institute of Technology (OPIT), pointed out in an email that it called into question the premise behind the Stargate Project,, opens new tab a $500 billion joint venture by OpenAI, SoftBank and Oracle to build AI infrastructure in the U.S., which was announced with great fanfare by Donald Trump just days before DeepSeek’s announcement.

“Stargate has been premised on the notion that breakthroughs in AI require massive compute and expensive, proprietary infrastructure,” Vazdar said in an email.

There are also dangers in markets being dominated by such a small group of tech companies. As Abbie Llewellyn-Waters, Investment manager at Jupiter Asset Management, pointed out in a research note, the “Magnificent Seven” tech stocks had accounted for nearly 60% of the index’s gains over the previous two years. The group of mega-caps comprised more than a third of the S&P 500’s total value in December 2024.

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