As some one who is into AI/ML, I thought I would share my perspective here. It's going to be a bit lengthy though...
So typically, a programmer writes algorithms to solve real life challenges. Every algorithm, no matter how complex can be reduced to just three operations : AND, OR and NOT. But building fortresses of layers around these operations tickles the complexity monster and he comes waging war against the programmer. Enter AI, We can think of AI as the inverse of programming, in the same way that the square root is the inverse of the square, or integration is the inverse of differentiation. Just as we can ask “What number squared gives 16?” or “What is the function whose derivative is x + 1?” we can ask, “What is the algorithm that produces this output?”. Basically, given a problem, a machine learning would spit out an algorithm/program to solve it. So does that mean a Machine can replace all of us? Well relax, they're not there yet...
To put it in simpler words, We know how to drive cars and decipher handwriting, but these skills are subconscious; we’re not able to explain to a computer how to do these things. So instead, you give multiple examples of the above operations and the computer tries to learn patterns from it. Some learners learn knowledge, and some learn skills. “All humans are mortal” is a piece of knowledge. Driving a car is a skill. In machine learning, knowledge is often in the form of statistical models. Skills are often in the form of procedures: if the road curves left, turn the wheel left; if a deer jumps in front of you, slam on the brakes. (Unfortunately, as of this writing Google’s self-driving cars still confuse windblown plastic bags with deer.) Often, the procedures are quite simple, and it’s the knowledge at their core that’s complex.
As businesses grow, they go through three phases. First they do things manually, think of owners of a mom-and-pop store. They personally know their customers, and order, display and recommend items based on their tastes. But this won't scale. In the second and the least happy phase, the business would need computers. In comes programmers, consultants, database architects, sales and support engineers and millions of complex lines of code get written. After a point the programs written would fail to match the versatility of human whims and fancies. The third phase would be the Machine Learning phase, where the companies would let learning algorithms loose on the realms of data they've accumulated and let them divine what customers would prefer. Amazon can’t neatly encode the tastes of all its customers in a computer program, and Facebook doesn’t know how to write a program that will choose the best updates to show to each of its users. Yes, there's a lot left to be desired in both, but this would be the first step to it. If they try to program each and every transaction, then they would never be done.
Also, if AI would be sold in a departmental store, it's carton would read : "Just add data". Well it's data that's driving the world crazy today. Bing's algorithm may be better than Google, but you can't switch to Bing, thanks to Google's head start and the bucketful of data it has about you. Traditionally product management was all about code re-usability, feature roadmap, extensibility and so on... The latest addition to product management would be to care about what data points the product would generate, so that the AI algorithms can do their duty of making the life of the user easier. The biggest challenge, however, is assembling all this information into a coherent whole.
As one Pedro Domingos puts it in his Machine Learning book, Machine learning is just like farming. In an industrial society, goods are made in factories, which means that engineers have to figure out exactly how to assemble them from their parts, how to make those parts, and so on—all the way to raw materials. It’s a lot of work. But there’s another, much older way in which we can get some of the things we need: by letting nature make them. In farming, we plant the seeds, make sure they have enough water and nutrients, and reap the grown crops. Why can’t technology be more like this? It can, and that’s the promise of machine learning. Learning algorithms are the seeds, data is the soil, and the learned programs are the grown plants. The machine-learning expert is like a farmer, sowing the seeds, irrigating and fertilizing the soil, and keeping an eye on the health of the crop but otherwise staying out of the way. Imagine if farmers had to engineer each cornstalk in turn, instead of sowing the seeds and letting them grow: we would all starve forever...
The crux is, let's not worry about AI taking over the world and all that, it's too early. An AI system is not curious enough and it can only do tasks that it has been trained to do. There is no possibility that a self driving car is hatching a plan to kill you