Google purchased DeepMind Technologies Ltd in a deal worth a reported £240m ($500 million).
One of the DeepMind's current directors previously predicted AI machines will learn "basic vision, basic sound processing, basic movement control, and basic language abilities" by 2020.
Google has been improving the company's AI expertise and recently bought military robot maker Boston Dynamics, among other robotics companies.
It is believed to be working on a project to develop next-generation robots and is already trialling driverless vehicles.
DeepMind has become a major independent force in development of AI and currently develops algorithms for games, simulations and online commerce sites.
The Deepmind deal was first revealed by tech site re/code and it said Google CEO Larry Page led negotiations.
DeepMind is heavily involved in the enigmatic AI field of machine learning, where systems are improved as data is processed over time.
Last week Google CEO Eric Schmidt warned delegates at the World Economic Forum that technological innovation may wipe out whole swathes of jobs.
He said that many roles are being automated by IT systems and it would become one of the biggest global issues in the next two to three decades.
DeepMind's website is just a single page stating it combines "the best techniques from machine learning and systems neuroscience to build powerful general-purpose learning algorithms".
It was founded by 37-year-old Demis Hassabis in late 2010. DeepMind says it is "supported by some of the most iconic technology entrepreneurs and investors of the past decade".
The founder was a child chess prodigy and video game designer by the age of 16, who later went on study computer science at Cambridge and gained a PhD in Cognitive Neuroscience at University College London.
As the start-up expanded Dr Hassabis' firm took on additional directors to boost both technical and financial clout.
Those were IT entrepreneur Luke Nosek, Mustafa Suleyman, investment banker David Gammon, Skype co-developer Jaan Tallinn and machine super intelligence expert Shane Legg, in that order.
Mr Legg predicted there will be humanlike artificial general intelligence (AGI) before 2030, with "impressive proto-AGI" functionality by 2020.
Mr Gammon left as director in early 2012 to become chairman of Cambridge-based software games firm Frontier, while remaining an adviser to DeepMind.
Last June, venture capitalist Bart Swanson became the firm's sixth director.
Mr Swanson was formerly chairman of Summly before it was sold to Yahoo! and held a senior role at a firm before it was sold to eBay.
He also helped lead the international expansion of Amazon at the turn of the century.
Facebook unveiled a partnership with New York University last year for a new centre for artificial intelligence, aimed at harnessing the social network's vast resource of data.
The deal comes as Google and Samsung agreed a global patent cross-license partnership covering technologies and business areas.
The agreement covers the two companies' existing patents as well as those filed over the next 10 years, and was developed to stop needless litigation.
Original headline: Google Buys UK Intelligence Firm DeepMind
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