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AI categorisation is second nature to us software engineers, it's easy to forget that the average person probably only knows the architecture for a transformer and one or two CNNs.

https://xkcd.com/2501/

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What's a "basic machine learning system?" is this a question of the size of the model or the algorithm? Which algorithms are basic? If you've got an ensemble of models that includes multiple transformers not all of which are LLMs as well as CNNs, how do you think the marketing people should express that?
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Literally always LLM. AI is now synonym for LLM, regardless of what it meant before. Just like crypto is now synonym for e-currency and does not mean cryptography anymore.

People are not confused about these.

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No that's not true.

I've worked at a company whose product involved some decently advanced computer vision, marketed as AI (which isn't incorrect).

I've also seen companies that were doing machine learning before the LLM boom, who remarketed their machine-learning-based product as AI (which isn't incorrect).

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If you put AI on a project the average consumer will think it’s using ChatGPT or something like that

I mean I agree with you just that the popular perception of that word has changed

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Apart from when they're talking about AI generated videos or images, or the marketing people talking about an AI powered rice cooker https://tefalph.com/cooking-appliances/easy-rice-plus-rice-c... or people watching films where an AI takes over
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It also means Diffusion in the context of images and videos.
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Or anything that used to be called machine learning, in the context of some consumer appliances.

Or sometimes basic image recognition.

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