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The annual conference of the American Association for Artificial Intelligence (AAAI) is the largest and most important meeting of AI theoreticians and practitioners in the United States This year, the conference was held in Seattle, Wash, and paid attendance was just under 5100 Last year's Philadelphia conference drew 5400 The drop in attendance was primarily the result of competition with the International /oint Conference on Artificial Intelligence, which took place in Milan a few weeks after AAAI I took advantage of the AAAI-87 exhibits to visit with a number of industry leaders and discuss the state of the U.S. AI marketplace. Vendors everywhere tend to be optimistic about their products and industries. Certainly, the AAAI vendors displayed optimism, but there was also an underlying current of doubt-or at least question. Questions raised by the vendors include the following: Does the recent lull in the market mean that the luster of AI and expert systems in particular is wearing thin? Are there more than a handful of significant expert systems in operation today?