Supervised vs. Unsupervised Learning In A Nutshell

Supervised vs. unsupervised learning describes two main types of tasks within the field of machine learning. In supervised learning, the researcher teaches the algorithm the conclusions or predictions it should make. In Unsupervised Learning, the model has algorithms able to discover and then present inferences about data. There is no teacher or single correct answer. Thus the machine learns on itself.

Supervised vs. unsupervised learning

What is supervised learning?

Supervised learning involves training a machine with well-labeled data. In other words, some input data is already tagged with the correct answer.

What is unsupervised learning?

Unsupervised learning, on the other hand, involves training a machine with data that is neither labeled nor classified. In this case, the algorithm acts on information and draws conclusions without human guidance.

Choosing between the supervised and unsupervised approach

Machine learning algorithms are trained according to the data available and the research question at hand. But, in any case, researchers who fail to identify the objective of the machine learning algorithm will not be able to build an accurate model.

In essence, the ability to build an accurate model comes down to a matter of choice. Algorithms can be trained using one of two models that help them make predictions about data:

  • Supervised learning – where the researcher teaches the algorithm the conclusions or predictions it should make.
  • Unsupervised learning – where the algorithm is left to its own devices to discover and then present inferences about data. There is no teacher or indeed single correct answer.

The next sections will look at each model in detail.

Supervised learning

In supervised learning, the researcher teaches the algorithm to use data that is well-labeled. That is, some of the data is already tagged with the correct answer. Then, the algorithm is provided with a new set of examples called training data that it uses to produce a correct outcome based on the labeled data.

Supervised learning problems can be categorized as:

  • Classification problems – where the output variable is a category such as “green” and “yellow” or “yes” and “no”. Examples include spam detection, face detection analysis, and the automated marking of exams.
  • Regression problems – where the output variable is a real value, such as “dollars” or “kilograms”. Regression algorithms (linear regression models) are used in any scenario requiring a prediction of numerical values based on previous observations. Examples include house and stock price predictions and weather forecasting.

Supervised learning algorithms

Note that multiple algorithms and computation techniques are used in a supervised learning process. A brief description of some of the more common techniques is provided below.

Neural networks

To process training data, neural networks mimic the interconnectivity of a human brain with various layers of nodes. Each of these nodes is comprised of inputs, weights, a threshold, and an output. When the output value exceeds the threshold, it activates the node and passes data to the next layer in the network.

Neural networks are primarily used in deep learning algorithms that solve some of the regression problems mentioned above.

K-nearest neighbor

The K-nearest neighbor (KNN) algorithm classifies data points according to their association and proximity to the other available data. The KNN algorithm thus assumes that the most similar data points are those found in close proximity. It first calculates the distance between data points and then attributes a category based on its frequency or average. 

KNN is the preferred supervised learning algorithm for data scientists because it is simple to use and offers a low calculation time. However, as the size of the dataset increases, so too does the processing time. This makes it less suited to classification tasks and more suited to use in image recognition and recommendation engines.

Linear and logistic regression

Linear regression makes predictions about future outcomes by determining the relationship between one dependent variable and one or multiple independent variables. 

Logistic regression is chosen when the dependent variables are categorical. This means they tend to be best suited to classification problems with binary outputs such as spam identification.

Random forest

A random forest is constructed from decision tree algorithms and can be used for both regression and classification problems. Decision trees form the basis of the random forest and consist of three components: leaf nodes, decision nodes, and a root node. Nodes represent the attributes that are used to predict outcomes.

The tree divides the dataset into branches which further divide into other branches and so on. The process continues until a leaf node is attained which cannot be divided further. Some of the major applications include:

  • Banking – to determine the creditworthiness of a loan applicant.
  • Healthcare – to diagnose patients based on their medical history, and
  • eCommerce – to predict consumer preferences based on past consumption behavior.

Unsupervised learning

Unsupervised learning involves training an algorithm with information that is neither labeled nor classified. Instead, the algorithm must group unsorted information according to patterns or similarities in the data without prior training.

Unsupervised learning algorithms are commonly used in:

  • Clustering tasks – where the goal is to discover inherent groupings in the data. For example, a marketing agency may use an algorithm to segment a target audience by purchasing behavior. 
  • Dimensionality tasks – where the algorithm seeks to reduce the number of variables, characteristics, or features in a dataset. Since some of these dimensions are correlated, redundant or repeated information can increase dataset noise and impact the training and performance of the model. This technique is often used in the data preprocessing stage such as when noise is removed from visual data to improve picture quality.
  • Association tasks – where the algorithm must find association rules in the data. The same marketing agency may look at what consumers tend to buy or do after purchasing a certain product. These tasks also form the basis of recommendation engines that show “Customers who purchased this product also bought” messages.
  • Anomaly tasks – where the algorithm searches the data for rare items or events. Many financial institutions use anomaly algorithms to detect instances of fraud in bank account records. Antivirus software also uses similar technology to identify malware.

Other unsupervised learning tasks

While clustering, dimensionality, association, and anomaly tasks are some of the most frequent an unsupervised learning algorithm will encounter, there do exist other types.

Density estimation

Density estimation, which has its roots in statistical analysis, estimates the density of the distribution of data points. In machine learning, density estimation is used in conjunction with anomaly tasks since data points in low-density regions tend to be outliers.

The distribution of data points is formally known as the probability density function (PDF). This can be used to determine whether the occurrence of a specific outlier is unlikely or whether its occurrence is so unlikely that it should be removed from the dataset. 

Association rule learning

Association rule learning is another unsupervised learning task primarily used by businesses to maximize profits. It analyzes datasets to discover relationships between variables that are non-obvious and requires a complex algorithm such as Apriori, FP-Growth, or Eclat. 

One application of association rule learning is product placement. Consider a supermarket that analyzes a transaction dataset to discover that consumers often buy bread with milk and onions with potatoes. 

Based on the relationships the algorithm detects, the supermarket can then place the items near each other to maximize revenue and profits. Insights from these relationships can also be used in promotional pricing and marketing campaigns.

Choosing between supervised and unsupervised learning

Machine learning is a vast field and as a result, choosing the right machine learning process can be difficult and resource intensive.

In very general terms, however, it is important to assess these pointers:

  1. Evaluate data. Perhaps an obvious point, but one worth mentioning. Is it labeled or unlabeled? Could expert consultation facilitate additional labeling?
  2. Define the goal. Is the problem defined and likely to reoccur? Alternatively, will an algorithm have a better chance of identifying unknown problems ahead of time?
  3. Review the available algorithms. Which are best suited to the problem in terms of the number of features, attributes, or characteristics? Algorithm choice should also be sensitive to the overall structure and volume of data to be analyzed.
  4. Study historical applications. Where has the algorithm already been used to great success? Consider reaching out to organizations or individuals who have demonstrable skills in a comparable field.

Summary of the core differences

To conclude this comparison on supervised and unsupervised learning, let’s discuss the core differences according to an assortment of parameters.

  • Input data – supervised learning algorithms are trained on labeled data, while unsupervised algorithms are not.
  • Computational complexity – supervised learning is a simpler method that only requires a program like Python or R. Unsupervised approach is more complex and thus requires more powerful tools. 
  • Accuracy and classes – supervised learning is more accurate, trustworthy, and the number of classes is known. The number of classes is not known in unsupervised learning, and it tends to be less accurate and trustworthy.
  • Data analysis – while supervised learning analyzes offline data, the unsupervised approach analyzes data in real time.
  • Objective – the objective of supervised learning is to predict outcomes for new data. The objective of unsupervised learning is to gather data insights based on what the model determines is interesting or different.
  • Potential drawbacks – supervised learning is a training approach that takes time and human expertise. On the other hand, unsupervised learning can yield inaccurate or worthless results unless there is a human to validate output variables.

Key takeaways

  • Supervised learning involves training a machine with data that is well-labeled. In other words, some input data is already tagged with the correct answer. Unsupervised learning involves training a machine with data that is neither labeled nor classified.
  • In supervised learning, the researcher teaches the algorithm to arrive at a desirable answer given labeled data points. It has applications in examination marking, facial recognition, and weather forecasting.
  • In unsupervised learning, the algorithm must group unsorted information that is neither labeled nor classified without instruction. Unsupervised learning has important uses in detecting bank fraud and malware. It is also used to identify patterns in consumer buying behavior.

Connected AI Concepts

AI Paradigm




Large Language Models

Large language models (LLMs) are AI tools that can read, summarize, and translate text. This enables them to predict words and craft sentences that reflect how humans write and speak.

Generative Models


Prompt Engineering

Prompt engineering is a natural language processing (NLP) concept that involves discovering inputs that yield desirable or useful results. Like most processes, the quality of the inputs determines the quality of the outputs in prompt engineering. Designing effective prompts increases the likelihood that the model will return a response that is both favorable and contextual. Developed by OpenAI, the CLIP (Contrastive Language-Image Pre-training) model is an example of a model that utilizes prompts to classify images and captions from over 400 million image-caption pairs.


Generalized AI consists of devices or systems that can handle all sorts of tasks on their own. The extension of generalized AI eventually led to the development of Machine learning. As an extension to AI, Machine Learning (ML) analyzes a series of computer algorithms to create a program that automates actions. Without explicitly programming actions, systems can learn and improve the overall experience. It explores large sets of data to find common patterns and formulate analytical models through learning.

Deep Learning vs. Machine Learning

Machine learning is a subset of artificial intelligence where algorithms parse data, learn from experience, and make better decisions in the future. Deep learning is a subset of machine learning where numerous algorithms are structured into layers to create artificial neural networks (ANNs). These networks can solve complex problems and allow the machine to train itself to perform a task.


DevOps refers to a series of practices performed to perform automated software development processes. It is a conjugation of the term “development” and “operations” to emphasize how functions integrate across IT teams. DevOps strategies promote seamless building, testing, and deployment of products. It aims to bridge a gap between development and operations teams to streamline the development altogether.


AIOps is the application of artificial intelligence to IT operations. It has become particularly useful for modern IT management in hybridized, distributed, and dynamic environments. AIOps has become a key operational component of modern digital-based organizations, built around software and algorithms.

Machine Learning Ops

Machine Learning Ops (MLOps) describes a suite of best practices that successfully help a business run artificial intelligence. It consists of the skills, workflows, and processes to create, run, and maintain machine learning models to help various operational processes within organizations.

OpenAI Organizational Structure

OpenAI is an artificial intelligence research laboratory that transitioned into a for-profit organization in 2019. The corporate structure is organized around two entities: OpenAI, Inc., which is a single-member Delaware LLC controlled by OpenAI non-profit, And OpenAI LP, which is a capped, for-profit organization. The OpenAI LP is governed by the board of OpenAI, Inc (the foundation), which acts as a General Partner. At the same time, Limited Partners comprise employees of the LP, some of the board members, and other investors like Reid Hoffman’s charitable foundation, Khosla Ventures, and Microsoft, the leading investor in the LP.

OpenAI Business Model

OpenAI has built the foundational layer of the AI industry. With large generative models like GPT-3 and DALL-E, OpenAI offers API access to businesses that want to develop applications on top of its foundational models while being able to plug these models into their products and customize these models with proprietary data and additional AI features. On the other hand, OpenAI also released ChatGPT, developing around a freemium model. Microsoft also commercializes opener products through its commercial partnership.


OpenAI and Microsoft partnered up from a commercial standpoint. The history of the partnership started in 2016 and consolidated in 2019, with Microsoft investing a billion dollars into the partnership. It’s now taking a leap forward, with Microsoft in talks to put $10 billion into this partnership. Microsoft, through OpenAI, is developing its Azure AI Supercomputer while enhancing its Azure Enterprise Platform and integrating OpenAI’s models into its business and consumer products (GitHub, Office, Bing).

Stability AI Business Model

Stability AI is the entity behind Stable Diffusion. Stability makes money from our AI products and from providing AI consulting services to businesses. Stability AI monetizes Stable Diffusion via DreamStudio’s APIs. While it also releases it open-source for anyone to download and use. Stability AI also makes money via enterprise services, where its core development team offers the chance to enterprise customers to service, scale, and customize Stable Diffusion or other large generative models to their needs.

Stability AI Ecosystem


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