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The Analytical AI Handbook

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Why This Matters

Analytical AI represents a crucial shift in AI applications, focusing on decision-making and data processing rather than content generation. Its ability to handle measurable, specific tasks efficiently makes it vital for operational decision-making across industries, offering cost-effective and scalable solutions for data-driven processes.

Key Takeaways

​ What is Analytical AI?

In late 2022, the “ChatGPT moment” happened. The masses began to understand the general power of foundation models, and developers immediately started incorporating them into a slew of new products.

At the same time a less discussed usage pattern also emerged: data, research, ops, and product teams began using foundation models to process unstructured data and make scaled operational decisions.

Put simply: if the AI’s job is to decide something, rather than create something, it’s analytical AI.

​ Why does Analytical AI matter?

While the distinction may seem subtle, best-practices for analytical purposes often diverge from other generative use cases. This is for a few primary reasons:

Tasks are typically measurable. You can create a ground-truth dataset using expert annotations that can be validated against for correctness. Other generative AI outputs are not directly measurable, which is why you need to build evals (a special case of analytical AI) to measure them. Tasks are often specific and discriminative, not general and emergent. You use an LLM’s autoregressive reasoning and instruction-following capabilities to make decisions, but reduce “creativity” in favor of consistency. For this reason, the task can often be run on the smallest possible model that’s been evaluated for task accuracy, rather than reaching for the largest, maximally-intelligent model. Because analytical AI typically does not involve a transaction with a user, more latency is tolerated - so batch and other flexible workload processing models are acceptable, often saving tremendously on costs and overall processing time. This is analogous to OLTP vs. OLAP/map-reduce style data processing.

Property Other GenAI Analytical AI Examples Write text/code, generate images/videos, converse with users Classify, extract, judge, normalize, match, score Operational Paradigm Many different user tasks One task, many times Interaction Pattern User-facing, transactional Typically internal data processing & workflows Model Needs Maximum intelligence and size subject to cost constraints Minimum intelligence and size required for accurate task completion Serving & Latency Low-latency, real-time/online High-throughput, batch/offline Determinism Expectations Diverse responses, emergent behavior Consistency, close-to-deterministic behavior User Personas Consumers, Misc. Professionals Data Scientists/Engineers, Ops, Evals, Product Analytics Task Supervision Supervised, interactive Unsupervised Analog OLTP Databases, Web Applications OLAP Databases, Data Pipelines

​ Who is this guide for?

Data, ML, and analytics teams using LLMs to transform unstructured datasets to structured ones

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