Artificial intelligence (AI) refers to simulating human intelligence through machine programming. AI involves machine learning, which uses data to allow machines to make decisions, and deep learning, which applies neural networks to solve complex problems. Some applications of AI include chatbots using natural language processing, self-driving cars using computer vision to detect objects, robotics combining AI and mechanics, and image processing extracting information from images. While AI provides benefits like precision, speed, and decision making, challenges include a lack of common sense and emotional skills as well as increasing unemployment.