Generative AI vs Predictive AI: What is the Key Difference?

Last updated by Naina Batra on Nov 07, 2024 at 03:13 PM | Reading time: 11 minutes

Artificial Intelligence is changing the world around us at a whirlwind pace. There are two aspects that stand out in this AI era. Generative AI and Predictive AI. Despite being sounding similar, there is difference between generative AI vs predictive AI.

While Generative AI aims at creating something from scratch, Predictive AI aims to assess future occurrences. We will go into more detail about the differences in the article. With the help of vast datasets and sophisticated ML learning techniques, Generative AI can generate a diverse range of original content across various domains. Predictive AI, on the other hand, is used for prediction. Unlike the Generative AI, Predictive AI's work is to analyze the present data and the data it has learned and predict the outcome. This type of AI uses historical data and translates it into forecasted trends and events.

In this article, we will dive deeper and understand the difference between generative AI vs predictive AI.

What is Generative AI?

Generative AI generates original content, imitating human patterns and creativity. It could be a music track, an artwork, or even a news piece. Generative AI is based on machine learning techniques, primarily deep learning algorithms. The latter analyses vast content bodies – text, images, sounds, etc.

The AI algorithm identifies patterns, structures, and relations within the data. It learns a “language” unique to the data it learns from. Finally, the learned generative AI can start creating entirely original works. By combining the recognized patterns, it creatively cooperates with them, generating its own – novel and yet similar to the training data.

The most popular generative AI tool is OpenAI's ChatGPT which can generate text, audio and image output based on your prompts or instructions.

Benefits of Generative AI

Generative AI has tremendous potential in many industries. From being a supportive tool for creators, aiding them in exploring new creative avenues to serving as a catalyst for innovation and efficiency across various sectors.

More Creativity: It enhances creativity, helping artists, designers, and even musicians to dig into new grounds. AI produces design solutions, composes music, or writes original creative content – poems, scripts, etc.
Creating content at scale: Generative AI can assist with content creation and automate various tasks, from writing product descriptions, and social media posts, to marketing content. This allows freeing more resources for humans to engage in analytical and strategic challenges.‍
Personalized experiences: It goes beyond the simple variant1-variant2 type of content. Along with generating images of things that a person can like more or less, generative AI can also generate images that a person will like the most.

Generative AI is permeating every industry facet, making it increasingly essential to grasp its fundamentals. For those uninterested in delving deep into AI complexities, mastering Generative AI offers a pragmatic approach.

By incorporating Generative AI skills into your role, you can immediately leverage its benefits and stay relevant in a rapidly evolving technological landscape.

Our Applied Gen AI program has been built for working professionals who want to tap into Generative AI and build applications.

We also have Advanced GenAI program for Machine Learning Engineers, Applied Scientists, Data Scientists, who are looking to master LLMs and Generative AI.

What Is Predictive AI?

As the name suggest, predictive AI is more inclined towards predicting the outcome based on the given input. In Predictive AI, the model collects the largest amount of historical data possible, and this data may come from various sources, such as customers, sensor readings, or finance records.

Machine learning algorithms collect and analyze the data, then look for patterns or correlations. These patterns point to trends or relationships that may not be clear to humans. Based on these recognized patterns, the AI constructs models that can forecast the future based on these patterns. These models can be simple linear regressions or complex neural nets.

Predictive AI is popularly applied in the following fields:

Finance: It can be used to predict how the stock market will change and to evaluate people’s creditworthiness or chances of committing fraud.
Healthcare:Artificial Intelligence in Healthcare is making strides, thanks to ML algorithms. Predictive AI is used to pinpoint patients who are likely to develop some kind of disease or to calculate how efficient a certain therapy is.
Retail: It can help with the forecasting of the product demand and optimizing inventory.‍
Marketing: It is used to adjust marketing strategies, especially while managing ad campaigns and targeting specific audiences.

Benefits of Predictive AI

Here are some advantages of Predictive AI:

Improved decision-making: It is able to anticipate future trends and boost businesses by improving their work process. This will save time and improve the efficiency of the organization.
Risk management: Predictive software determines the risks and helps you to be prepared for any pitfalls. Fraud detection, IT security, and operating machinery—everything is estimated beforehand.
Personalized user experience: Predictive software is used by online and offline markets to evaluate the customers' preferences based on their previous searches, purchases, or other online activity. The platform can offer you what you want to see.

Differences Between Generative AI vs Predictive AI

Now that you understand what is generative AI and predictive AI, let's understand the difference between generative AI vs predictive AI.

Let's start with their fundamental difference in terms of objective and its core functions.

Objective and Core Functionality

Generative AI

Generative AI focuses on creating new and original content, which can image, text, audio or even video. One way to think about it is as an artist’s palette. Generative AI draws on knowledge from existing works, but its goal is to take these inspirations and use them to create something entirely new.

In most cases, it's applied in creative industries like design, marketing, and content production. A few examples include ChatGPT or DALL-E tools that use expansive datasets to come up with novel responses or visuals.

Predictive AI

In contrast, Predictive AI is the fortune teller of the AI world. As the name suggests, this type of AI doesn’t create anything. Rather, it analyses existing data to make future predictions. In this case, it doesn't come up with new content, but it runs through patterns made historically to make an informed prediction regarding possible future trends, customer behavior, or operational needs.

Predicative AI is applied in real life, especially by business firms, in areas like demand forecasting, fraud detection, and customer retention, where data-driven predictions help make business decisions. This capability is incredibly valuable for companies and organizations who want to derive meaningful insights from their data to make informed decisions.

Common techniques used in predicative AI are decision trees, regression models, and clustering, which help predict what will happen next based on the continuation of past patterns. Based on patterns and relationships it identifies in historical data, Predictive AI can make informed guesses as to what might happen next.

Generative AI vs Predictive AI: Difference in Data usage

Generative AI requires very high-quality and diversified datasets for training so that the produced outputs might be relevant and coherent. Put simply, such an AI learns patterns from the data and creates new content-not a copy or replica of the training data. Without good data, generative AI will simply fail to create good outputs, which is the reason why not every genAI product out there is successful.

Predictive AI determines correlation, as well as trends, to make predictive possibilities using historical data. Predictive AI also makes use of data analytics and machine learning to provide actionable insights in sectors such as finance, retail, or any businesss informing strategy and planning. In case of predictive AI, the data used is more contextual to the expected outcome.

Difference Between Generative AI and Predictive AI in Terms of Use Cases in Business

Businesses are increasingly making use of both generative AI and predictive AI (AI in general) to improve business and their products. There are a lot of benefits that AI can bring to businesses.

For example, generative AI would be perfect for applications such as personalized marketing, content generation, product designs, or generate ideas on innovative ways to connect with customers and help bring ideas into reality. Predictive AI is used in cases like supply chain management, personalized recommendations (recommendation engines), and fraud detection. It is extensively used where past data can help uncover hidden insights and help take better decisions.

However, both generative AI and predictive AI can be used in complementary of each other. For example, businesses can use predictive AI for customer segmentation and the used generative AI to develop custom marketing content for every segment.

Also read: Steps to Integrate Generative AI in Engineering Workflows

Limitations of Generative AI

Generative AI has several limitations even though it is a powerful technology:

The output is only as good as the data it was trained on. Any bias and skewed data input into the model will be reflected in the output. It is also difficult to control the exact output of the AI.
The AI can generate a new output, but the question remains about the originality of the output and the essence of human creativity in general. The AI might be using just remixes of ideas it was trained on.
The development of realistic deep fakes and AI-generated content modification software brings a lot of ethical implications for gen AI. A more responsible approach to developing and using generative AI is needed.

L‍imitations of Predictive AI

These are some of the limitations of Predictive AI:

Even the most advanced model will not predict correctly if the data used for training is of poor quality. Predictive software is as good as the database that provides source information.
None of the models will guess about events out of the general source. Data Prediction can be mistaken in case of unwanted events or sudden topic changes.
Finding the correct predictions in case of the algorithm is too complex for ordinary people to understand.

Learn to Use Advanced Generative AI and Advance Your Career With Interview Kickstart

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You can check out some of the success stories of our alumni who have advanced their careers with the help of Interview Kickstart.

‍FAQs: Generative AI vs Predictive AI

1. What is the difference between generative AI vs predictive AI?

Predictive AI is a type of AI that focuses on forecasting future events based on historical data. AI, on the other hand, is a broader field encompassing various functionalities, including prediction and content creation.

2. What is the difference between AI and GenAI?

Similar to the above, AI is a broader term. Generative AI is a specific type of AI that creates entirely new content, like images, music, or text formats.

3. Is ChatGPT predictive AI?

No, ChatGPT is a large language model, which falls under Generative AI. It is trained on large data sets and generates output based on the prompts given to it.

It largely focuses on generating creative text formats like poems, code, scripts, etc. It refers to information available on the internet, including books, scholarly articles, and many more materials while giving output. It doesn’t predict future events, hence ChatGPT is not Predictive AI.

4. Which is better? Generative AI or predictive AI?

They focus on different goals and must be used in the right context. Predictive AI is primarily focused on future event prediction, while generative AI creates new content based on trained data.

5. What is generative AI vs predictive AI vs conversational AI?

Generative AI: Creates new content (images, music, text).
Predictive AI: Forecasts future events (stock prices, customer churn).
Conversational AI: Interacts with users in a conversation-like manner (chatbots, virtual assistants).

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Naina Batra

Manager, Content Marketing

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Naina Batra

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Tools to Enhance Full Stack Development with AI

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Data-Driven Decision Making: Your Roadmap to Business Success

The Business Impact of Machine Learning: Real-world Case Studies

What is OpenAI? Everything You Need to Know

Mock Interviews for Generative AI: Essential Practice to Land Top AI Roles

Top Python Scripting Interview Questions and Answers You Should Practice

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