Your Conversational AI Glossary
Algorithm
What is an Algorithm?
An algorithm is a defined set of instructions that a computer or AI system follows to solve a problem, complete a task, or make a decision. Algorithms form the backbone of all digital processes — from simple calculations to advanced machine learning models.
How Do Algorithms Work?
In AI, algorithms process data through logical steps. Based on the task, they can:
Sort or organize information
Classify input into categories
Predict future outcomes
Find patterns in large datasets
AI systems often run multiple algorithms in tandem, allowing them to learn from data and improve over time.
Types of Common Algorithms in AI
Classification – Assigning items to categories (e.g., spam vs. not spam)
Regression – Predicting numerical values (e.g., price estimates)
Clustering – Grouping data by similarity without predefined labels
Decision Trees – Branching logic to make decisions based on input features
Why Algorithms Matter
Algorithms power everything from AI receptionists and recommendation engines to financial modeling and language translation. In conversational AI, they help determine:
What a caller means
How the system should respond
What action to take next
The smarter the algorithm, the better the experience for the end user.
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