What is applied AI?
Applied AI is the use of machine learning and related techniques to make a specific, repeatable business decision better: forecast a quantity, classify a case, detect an anomaly, recommend an option or optimise a plan. It is measured by the quality of the decision, not the sophistication of the model.
Applied AI systems are trained on your own historical data and integrated into the process where the decision is made. That integration, plus the monitoring that keeps the model honest, is most of the engineering.
Machine learning vs Generative AI: which do we need?
If the answer to your question is a number, a category, a ranking or a schedule, you need machine learning. If the input is language, documents or images and the output is text, an extract or assistance, you need Generative AI. Many systems need both, in different components.
The table above is the checklist we apply. The most common mistake is using a language model for a prediction task because it is available, and paying for it in latency, cost and untestable behaviour.
How much data do we need?
Enough history to cover the situations the model will face, including the rare ones that matter most, with labels or outcomes you trust. That is a question about coverage and quality, not row counts, and a short data review usually answers it before any modelling begins.
When data is thin, the honest answer is often a rules-based baseline first, instrumented to collect the outcomes a model will later learn from.
When is a rules-based system better than machine learning?
When the decision can be written down as rules the business already trusts, when the data is too sparse to learn from, or when every decision must be explainable line by line. Rules are also the baseline every model must beat to justify its cost.
We frequently ship a rules engine as the first production release and add a model only where the rules demonstrably fall short.
How do you handle model drift?
By monitoring input and output distributions against the training data, alerting when they shift beyond agreed thresholds, and having a tested retraining and rollback path ready before the first deployment. Drift is expected; being surprised by it is the failure.
The operating side of this, from model registry to automated retraining, is covered under MLOps.
How MLOps keeps models honest in production