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An intelligent entity must interact with its environment. A thinker who loses the capacity to interact with the environment will only have thoughts in his or her head but will not be able to perform any action. Also, this thinker will not be able to entertain any new input or sense any new information since it is disconnected with the environment. A thought trapped in a mind incapable of any interaction with the environment is not helpful to accomplish any work task. To perform a work task, therefore, an intelligent entity needs to interact with its environment.

Perhaps it will be helpful to make a distinction between thinking and acting. When we act, we create a change in the environment. Whether action is composed of movement or transferring data or sending a notification, it is something that materializes in the environment in which an intelligent artifact is operating. In other words, it does not happen in the mind of the artifact as it necessarily requires some type of expression that is based on interaction with the environment. As we make the distinction between thinking and action, we can view intelligence (thinking) and action as interdependent and interconnected. Thinking drives action—for example, you decide to make a right turn while driving—but action also drives thinking. For instance, as you start turning the steering wheel, the feedback from the car, the steering wheel that you are holding, and the surroundings send signals to your brain and the brain helps you to keep the car on the road as you perform the action of turning the car by turning the steering wheel. This hand and mind coordination can be viewed as constant back and forth rapid transition between states of thinking and acting. A thinking system does not think in isolation; it interacts with its environment.

Artificial Intelligence for Asset Management and Investment

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