Competitive differentiation is usually defined as some aspect of a company or institution that helps it create some sort of  value which is hard for a competitor to copy. The company is differentiated by the “hard to copy” thing. Classical management theory (“theory” might be too strong a word, since many things grouped in with management theory often don’t have much of an empirical basis) says that once a product or service is undifferentiated then it becomes a commodity, and it will be chosen from its peers based on its price to acquire (that price may include how difficult it is to acquire – so corner stores will sell commodities at higher prices because there is a relatively high cost to travel further to the supermarket).

Most people answer this question by saying “its software that can learn from data” and then get down to the nuts and bolts of various machine learning implementations. Sometimes they explain why its big now (there has been an explosion in the amount of data so the machines can learn better, and machines are faster due to cpu/gpu speed improvements).

My focus on the topic is about how its useful in building technology competency in a company or community.