Augmented Reality

Best example is Google glass. You wear the glass and if you walk in a market, as the glass has a camera, tries to see through the camera, recognize the shops, places, roads and interleave additional information on your glass so that you have more information to do something. Interleaving of extra information on the glass for you to see is nothing but augmenting your reality with more information.

Artificial Intelligence

Making machines intelligent to do tasks at which humans are very good and machines suffered till some time before. Best example is face recognition. Humans even babies are very good at it. Machines used to struggle to do it. All techniques used for enabling machines to do face recognition can be considered as AI. Face Recognition is just an example. AI is very broad.

Coming to the difference, AR is achieved using AI. There can be other ways to do AR, but AI also can be used.

To interleave additional information on google glass, it has to do object recognition, object detection and many more tasks. All that is possible with AI. What you do once you get all this tasks done is interleave this information on the glass for the user and this is AR.

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