It is well known that Google has been promoting artificial intelligence. Much of what they have done for years can be described as AI ... artificial intelligence ... advanced algorithmic methods to link the search behavior of consumers to their predicted desires. In other words serving up advertisements. A recent piece in Blogoscoped surveys the idea.
They are starting to play at the edges of what is possible today. Image analysis is an example. It is still an unsolved problem to analyze arbitrary images to determine their content. They have been serving up an image labeler game for some time to get people to do the heavy lifting. I have played, not sure how many people are participating.
They have supported work on image analysis. They admit that natural language is hard for translation. These are the premier examples of AI that still need cracking. It is nice to see a company placing so much emphasis on those tough AI problems.