The human brain is among the most complicated organs and one of nature’s most amazing creations. The brain’s capacity is considered limitless; there isn’t a thing it can’t remember. Although many often don’t think about it, the processes that happen in the mind are fascinating.


As technology evolved over the years, scientists figured out a way to make machines think like humans, and this process is called machine learning. Like cars need fuel to operate, machines need data and algorithms. With the application of adequate techniques, machines can learn from this data and even improve their accuracy as time passes.


Two basic machine learning approaches are supervised and unsupervised learning. You can already assume the biggest difference between them based on their names. With supervised learning, you have a “teacher” who shows the machine how to analyze specific data. Unsupervised learning is completely independent, meaning there are no teachers or guides.


This article will talk more about supervised and unsupervised learning, outline their differences, and introduce examples.


Supervised Learning


Imagine a teacher trying to teach their young students to write the letter “A.” The teacher will first set an example by writing the letter on the board, and the students will follow. After some time, the students will be able to write the letter without assistance.


Supervised machine learning is very similar to this situation. In this case, you (the teacher) train the machine using labeled data. Such data already contains the right answer to a particular situation. The machine then uses this training data to learn a pattern and applies it to all new datasets.


Note that the role of a teacher is essential. The provided labeled datasets are the foundation of the machine’s learning process. If you withhold these datasets or don’t label them correctly, you won’t get any (relevant) results.


Supervised learning is complex, but we can understand it through a simple real-life example.


Suppose you have a basket filled with red apples, strawberries, and pears and want to train a machine to identify these fruits. You’ll teach the machine the basic characteristics of each fruit found in the basket, focusing on the color, size, shape, and other relevant features. If you introduce a “new” strawberry to the basket, the machine will analyze its appearance and label it as “strawberry” based on the knowledge it acquired during training.


Types of Supervised Learning


You can divide supervised learning into two types:


  • Classification – You can train machines to classify data into categories based on different characteristics. The fruit basket example is the perfect representation of this scenario.
  • Regression – You can train machines to use specific data to make future predictions and identify trends.

Supervised Learning Algorithms


Supervised learning uses different algorithms to function:


  • Linear regression – It identifies a linear relationship between an independent and a dependent variable.
  • Logistic regression – It typically predicts binary outcomes (yes/no, true/false) and is important for classification purposes.
  • Support vector machines – They use high-dimensional features to map data that can’t be separated by a linear line.
  • Decision trees – They predict outcomes and classify data using tree-like structures.
  • Random forests – They analyze several decision trees to come up with a unique prediction/result.
  • Neural networks – They process data in a unique way, very similar to the human brain.

Supervised Learning: Examples and Applications


There’s no better way to understand supervised learning than through examples. Let’s dive into the real estate world.


Suppose you’re a real estate agent and need to predict the prices of different properties in your city. The first thing you’ll need to do is feed your machine existing data about available houses in the area. Factors like square footage, amenities, a backyard/garden, the number of rooms, and available furniture, are all relevant factors. Then, you need to “teach” the machine the prices of different properties. The more, the better.


A large dataset will help your machine pick up on seemingly minor but significant trends affecting the price. Once your machine processes this data and you introduce a new property to it, it will be able to cross-reference its features with the existing database and come up with an accurate price prediction.


The applications of supervised learning are vast. Here are the most popular ones:


  • Sales – Predicting customers’ purchasing behavior and trends
  • Finance – Predicting stock market fluctuations, price changes, expenses, etc.
  • Healthcare – Predicting risk of diseases and infections, surgery outcomes, necessary medications, etc.
  • Weather forecasts – Predicting temperature, humidity, atmospheric pressure, wind speed, etc.
  • Face recognition – Identifying people in photos

Unsupervised Learning


Imagine a family with a baby and a dog. The dog lives inside the house, so the baby is used to it and expresses positive emotions toward it. A month later, a friend comes to visit, and they bring their dog. The baby hasn’t seen the dog before, but she starts smiling as soon as she sees it.


Why?


Because the baby was able to draw her own conclusions based on the new dog’s appearance: two ears, tail, nose, tongue sticking out, and maybe even a specific noise (barking). Since the baby has positive emotions toward the house dog, she also reacts positively to a new, unknown dog.


This is a real-life example of unsupervised learning. Nobody taught the baby about dogs, but she still managed to make accurate conclusions.


With supervised machine learning, you have a teacher who trains the machine. This isn’t the case with unsupervised learning. Here, it’s necessary to give the machine freedom to explore and discover information. Therefore, this machine learning approach deals with unlabeled data.


Types of Unsupervised Learning


There are two types of unsupervised learning:


  • Clustering – Grouping uncategorized data based on their common features.
  • Dimensionality reduction – Reducing the number of variables, features, or columns to capture the essence of the available information.

Unsupervised Learning Algorithms


Unsupervised learning relies on these algorithms:


  • K-means clustering – It identifies similar features and groups them into clusters.
  • Hierarchical clustering – It identifies similarities and differences between data and groups them hierarchically.
  • Principal component analysis (PCA) – It reduces data dimensionality while boosting interpretability.
  • Independent component analysis (ICA) – It separates independent sources from mixed signals.
  • T-distributed stochastic neighbor embedding (t-SNE) – It explores and visualizes high-dimensional data.

Unsupervised Learning: Examples and Applications


Let’s see how unsupervised learning is used in customer segmentation.


Suppose you work for a company that wants to learn more about its customers to build more effective marketing campaigns and sell more products. You can use unsupervised machine learning to analyze characteristics like gender, age, education, location, and income. This approach is able to discover who purchases your products more often. After getting the results, you can come up with strategies to push the product more.


Unsupervised learning is often used in the same industries as supervised learning but with different purposes. For example, both approaches are used in sales. Supervised learning can accurately predict prices relying on past data. On the other hand, unsupervised learning analyzes the customers’ behaviors. The combination of the two approaches results in a quality marketing strategy that can attract more buyers and boost sales.


Another example is traffic. Supervised learning can provide an ETA to a destination, while unsupervised learning digs a bit deeper and often looks at the bigger picture. It can analyze a specific area to pinpoint accident-prone locations.



Differences Between Supervised and Unsupervised Learning


These are the crucial differences between the two machine learning approaches:


  • Data labeling – Supervised learning uses labeled datasets, while unsupervised learning uses unlabeled, “raw” data. In other words, the former requires training, while the latter works independently to discover information.
  • Algorithm complexity – Unsupervised learning requires more complex algorithms and powerful tools that can handle vast amounts of data. This is both a drawback and an advantage. Since it operates on complex algorithms, it’s capable of handling larger, more complicated datasets, which isn’t a characteristic of supervised learning.
  • Use cases and applications – The two approaches can be used in the same industries but with different purposes. For example, supervised learning is used in predicting prices, while unsupervised learning is used in detecting customers’ behavior or anomalies.
  • Evaluation metrics – Supervised learning tends to be more accurate (at least for now). Machines still require a bit of our input to display accurate results.

Choose Wisely


Do you need to teach your machine different data, or can you trust it to handle the analysis on its own? Think about what you want to analyze. Unsupervised and supervised learning may sound similar, but they have different uses. Choosing an inadequate approach leads to unreliable, irrelevant results.


Supervised learning is still more popular than unsupervised learning because it offers more accurate results. However, this approach can’t handle larger, complex datasets and requires human intervention, which isn’t the case with unsupervised learning. Therefore, we may see a rise in the popularity of the unsupervised approach, especially as the technology evolves and enables more accuracy.

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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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