What is Natural Language Processing? - Explanation & Meaning

Definition

Natural language processing (NLP) is a subfield of artificial intelligence focused on the interaction between computers and human language, enabling machines to understand, interpret, and generate text and speech.

Technical explanation

NLP encompasses a broad range of tasks, from basic processing like tokenization (splitting text into words or subwords), part-of-speech tagging, and named entity recognition (NER), to advanced tasks such as sentiment analysis, machine translation, text summarization, and question-answering systems. Historically, NLP relied on statistical methods and manual feature engineering, but the transformer architecture (2017) fundamentally changed the field. Modern NLP is dominated by pre-trained language models applied to specific tasks via transfer learning. In 2026, LLMs have subsumed most classical NLP tasks: a single model can classify, translate, summarize, and generate without task-specific architectures. Embeddings — dense vector representations of words and sentences — form the foundation for semantic search and clustering. Multilingual models support hundreds of languages simultaneously, enabling rapid international deployment of NLP applications. Yet specialized NLP models remain relevant for tasks requiring low latency or extreme accuracy.

How MG Software applies this

At MG Software, we deploy NLP across diverse client solutions: from chatbots that understand natural language to document classification systems, sentiment analysis on customer reviews, and multilingual content processing. We combine LLM-based NLP with traditional techniques where precision and speed are critical.

Practical examples

• A customer service platform using NLP to automatically classify incoming messages by urgency and topic, routing tickets directly to the right team and improving response time by 50%.
• An international organization deploying real-time machine translation for internal communication between teams in 12 countries, supported by domain-specific terminology databases.
• A financial institution applying sentiment analysis to news articles and social media to monitor market sentiment and flag early risks in their investment portfolio.

Related terms