What Is Natural Language Processing? A Comprehensive Guide

Natural Language Processing (NLP) allows computers to generate, understand, and effectively communicate with humans through language.

NLP allows for voice and language applications and significantly improves the transmission of information between humans and machines. It can also help human-to-human communications through translation tools that can accurately capture the meaning and tones of the speaker’s words.

In this article, I’ll walk you through the world of Natural Language Processing.

I’ll provide everything you need to get an intuitive understanding of the technology, and how you’re likely to use it.

What is Natural Language Processing?

Natural Language Processing (NLP) is a subfield of Artificial Intelligence and computational linguistics focused on enabling computers to understand, interpret, and generate human language.

NLP combines computational linguistics, machine learning, and deep learning techniques to analyze and synthesize text and speech.

An image showing an assortment of speech bubbles and interconnected in a complex manner. The image conveys the intricacies of Natural Language Processing.

Natural Language Processing is used in various applications like voice assistants, chatbots, sentiment analysis, and machine translation, bridging the gap between human communication and computer understanding.

There are countless books on artificial intelligence and natural language processing if you’re after a a deep-dive into the topics.

The History of Natural Language Processing

John McCarthy, a computer scientist who is credited with the term "artificial intelligence," plays chess against a computer (1966) - Chuck Painter
John McCarthy, a computer scientist who is credited with the term “artificial intelligence,” plays chess against a computer (1966) – Chuck Painter

Natural language processing was first seen in the mid-1950s as early computer linguistics and machine learning methods began to appear.

The Turing Test set the foundation for machines to interpret and generate human languages by establishing the principle that a machine’s intelligence could be measured by its ability to produce indistinguishable human-like responses in a conversation.

This idea of machine intelligence guided the early directions of NLP and brought about a new era, one where machines could communicate with humans.

Core Components of NLP

Natural Language Processing is a broad field encompassing several sub-disciplines: Natural Language Understanding (NLU), and Natural Language Generation (NLG).

While NLP is the overarching field that allows machines to understand, process, and generate human language, natural language understanding, and natural language generation are specialized components of this process.

NLU involves interpreting the meanings of human language (understanding what you say) while NLG is about generating meaningful phrases and sentences in a human-like manner (responding with something you’ll understand).

Together, these components enable interactive and intelligent systems that can engage with humans in a meaningful way. We’ll take am individual look at NLU and NLG later in the article.

Natural Language Understanding (NLU)

Natural Language Understanding goes beyond merely processing language. NLU aims to comprehend the intricacies and nuances of language, tackling ambiguities and understanding context.

NLU considers two main aspects of human language:

  • Semantics: Semantic analysis describes the process of interpreting the true meaning of words, phrases, and sentences in context. Semantic analysis is about understanding the direct and literal meanings of text.
  • Pragmatics: Pragmatics deals with the understanding of language in context, deciphering implied meanings that depend on the situation, speaker’s intent, cultural aspects, and other factors beyond the literal content of the language.

You can think of NLU as the part that enables computers to understand thick accents and slang words.

By breaking down language in this manner, NLU gives computers a much greater understanding of the nuances of human dialect.

Natural Language Generation (NLG)

Natural Language Generation is the process that allows computers to create human-like responses from data.

This field of NLP is what allows the AI to ‘back and forth’, effectively sustaining a conversation with the user.

NLG uses statistical methods and language models to analyze large amounts of text data to predict what text comes next, allowing it to generate sentences that make sense.

NLG is used to summarize text, translate languages, and even generate creative content like stories or poems, all of which we’ve seen implemented with tools like ChatGPT many times over.

Techniques of Natural Language Processing

NLP involves several techniques that help computers understand and analyze language effectively. Let’s take a closer look at some of the fundamentals:

  • Tokenization: Tokenization breaks text into individual words or tokens, making it easier for deep learning models to process the text.
  • Part-of-Speech Tagging: Part of Speech tagging assigns grammatical roles to these tokens such as whether it’s a noun, verb, adjective, etc.
  • Parsing: Parsing involves analyzing the grammatical structure of a sentence. It helps a computer understand the relationship between different words.
  • Named Entity Recognition: Named Entity Recognition (NER) scans the text to identify and categorize key information like names and places. It’s effectively capturing the who, where, and when of a text.
  • Co-reference Resolution: Co-reference resolution helps the computer understand the context by linking pronouns or abbreviated terms back to the original entities they refer to. For example, in the sentence “Sara said she would visit the park,” the term “she” refers back to “Sara.”
  • Sentiment Analysis: Sentiment Analysis involves determining the underlying sentiment or emotion of a piece of text, whether it’s positive, negative, or neutral.
  • Word Sense Disambiguation: Word sense disambiguation is essential for machines to grasp the nuanced meanings of words based on the context in which they appear. For instance, the word “bank” could refer to a financial institution or the side of a river. Word sense disambiguation algorithms help the machine determine which meaning is relevant in a given situation.

Many of the top machine learning newsletters talk about the latest developments in NLP and are certainly worth a look if you’re interested in the space!

Machine Learning in NLP

Machine learning serves as the backbone for natural language models, employing algorithms to learn from large datasets.

Techniques like Naive Bayes, Decision Trees, and Support Vector Machines are commonly used for text classification, sentiment analysis, and language modeling.

These algorithms enable NLP systems to recognize patterns, understand context, and make predictions or decisions based on the data.

Deep Learning in NLP

Deep learning models takes NLP a step further by using neural networks to analyze complex language data.

Recurrent Neural Networks (RNNs) and Long Short-Term Memory (LSTM) networks are popular for sequence modeling tasks like machine translation and speech recognition.

These models can capture long-term dependencies and nuances in language, making them highly effective for NLP.

Popular algorithms in NLP include the Viterbi algorithm for part-of-speech tagging and Hidden Markov Models for sequence prediction.

More recently, Transformer models like BERT and GPT have gained prominence for their ability to handle a wide range of NLP tasks, from text summarization to question answering.

These algorithms are the building blocks that power various NLP applications, contributing to the field’s rapid advancements.

Real World Applications of NLP

Natural Language Processing has wide-reaching applications, many of these NLP tasks are becoming increasingly common in our daily lives:

  • Education: NLP is being utilized in intelligent tutoring systems to provide personalized instruction and feedback to students.
  • Law: NLP aids in extracting insights from complex legal documents or analyzing surveillance transcripts.
  • Finance: NLP is employed in the finance sector for risk analysis and fraud detection by interpreting unusual patterns of transactions. It can also be employed for stock trading applications.
  • Media: NLP can be used with speech recognition to generate automatic subtitles or assist in machine translation, enhancing accessibility for a global audience.
  • Marketing: NLP-driven recommendation systems analyze customer reviews and preferences to suggest personalized products or services.
  • Recruitment: NLP speech recognition is fastly being applied for job candidate screening and shortlisting.
  • Fitness: NLP can be employed to generate customized health and fitness plans by using existing workouts and information about the trainee.

The list of NLP tasks is far from exhaustive. The applications of NLP extend far and wide, its capabilities reshaping industries across the board.

Case Studies Using NLP


Retro looking computer user interface showing a short conversation between a user and the ELIZA NLP program.

Back in the 1960s, ELIZA was one of the first programs to mimic a conversation using computational linguistics. While she might not have truly ‘understood’ human language, she used simple pattern-matching rules to respond to user input.

ELIZA was a simple if-then rules-based system. This meant that ELIZA had a pre-defined set of responses to certain user inputs, similar to the very basic customer service chatbots we use today.

Although the technology is considered basic now, ELIZA was a pioneering force for NLP and computer science.

She helped to showcase the potential of machines to communicate with humans and truly was the grandmother of modern natural language processing.


Amazon’s virtual assistant Alexa is a perfect demonstration of NLP, NLU, and NLG in action.

When you ask Alexa a question, NLP helps break down your speech into understandable units, NLU interprets your intent and context, and NLG generates an appropriate and coherent response.

This complex process happens in mere seconds thanks to the powerful technology that is natural language processing!

Fighting Fraud

Have you ever received a call from your bank regarding suspicious activity on your account? These calls are largely triggered by financial institutions that have implemented NLP to combat fraud.

Mastercard uses an NLP-driven system called Decision Intelligence. This AI-based tool analyzes cardholder behaviors, locations, and purchasing patterns, identifying any unusual transactions that may indicate fraudulent activity.

By leveraging NLP and machine learning, Mastercard has significantly enhanced its ability to detect fraud, protect its customers, and secure their trust.

This demonstrates how NLP can effectively decipher patterns in vast data and is not just limited to human language.

The Future of NLP

As advances in AI continue and NLP becomes more widely adopted, we can expect to see NLP making an even greater impact in our everyday lives.

Imagine being able to have a conversation with someone in another language in real-time, or generating a bedtime story for your child on the spot, based on something that happened in their day, or even real-time AI sports commentating (this one is already happening).

These advancements will improve the way we can interact with the digital world more and more as they advance and serve to fundamentally change the way humans and machines interact.


Natural Language Processing is a transformative technology allowing us to better interact with machines and the digital world, as well as one another.

NLP already underpins everyday technologies like voice-enabled assistants and conversational AIs. NLP will undoubtedly go on to influence countless other sectors as AI continues to evolve.

The potential of natural language processing is limitless and personally I find it very exciting to be witnessing the progression of such a world-changing technology in real-time.

Well, that’s all from me. Hope you enjoyed this deep dive into NLP!

FAQs About Natural Language Processing

What is the difference between NLP, NLU, and NLG?

NLP (Natural Language Processing) is the overarching field that includes both NLU (Natural Language Understanding) and NLG (Natural Language Generation). NLU focuses on interpreting human language, while NLG is concerned with generating human-like text based on data or context.

How do voice assistants like Siri and Alexa use NLP?

Voice assistants use NLP to transcribe spoken words into text, understand the intent behind the query, and generate a suitable response. This involves multiple NLP components like speech recognition, text analysis, and text-to-speech conversion.

What are the common algorithms used in NLP?

Common algorithms include Naive Bayes for text classification, Decision Trees for rule-based parsing, and neural networks like RNNs and LSTMs for sequence modeling. Transformer models like BERT and GPT are also widely used.

How is NLP used in sentiment analysis?

NLP techniques like tokenization and text classification are used to break down text into smaller units and categorize them as positive, negative, or neutral. This helps in gauging public opinion or customer feedback.

What are the limitations of current NLP technology?

Current limitations include difficulty in understanding context, handling ambiguity, and capturing emotional nuances. Also, most models require large datasets for training, which can introduce bias.

How does NLP work in real-time translation?

NLP uses machine learning models to instantly translate text or speech from one language to another. This involves both understanding the source language and generating text in the target language, often in real-time.

Can NLP be used for data analysis?

Yes, NLP can analyze large volumes of text data to extract insights, trends, and patterns. This is commonly used in market research, social media monitoring, and even fraud detection. NLP is even being using alongside computer vision models to interpret and explain the physical world.

Is NLP the same as conversational AI?

While they are closely related, NLP is a component of conversational AI. NLP handles the language processing part, while conversational AI involves the broader aspects of maintaining a coherent and contextually relevant conversation.

What is the future of NLP?

The future of NLP includes more accurate models, real-time translation tools, and advanced sentiment analysis techniques. There’s also a focus on reducing biases and making models more interpretable.

How can I get started with NLP?

Getting started with AI, specifically NLP, you can take online courses, read research papers, or work on small projects. Popular programming languages for NLP include Python and R, and libraries like NLTK and SpaCy offer useful tools.

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