We've all seen familiar shapes in clouds - Karl Ludwig Kahlbaum is credited for coining the word "pareidolia" to describe what amounts to a partial hallucination, in a paper published in 1866.
An interesting sidenote for students of philosophy: as far as I know, this confusion of fanciful imaging with reality was noted thousands of years ago. Asanga noted it sometime between 310-390 BCE in his Mahayanasamgraha; here's a quote from the Nirvana Upanishad (100 BCE):
The phenomenal world is impermanent as it is produced [from Brahman which alone is real]; it is similar to a world seen in a dream and an [illusory] elephant in the sky; similarly, the cluster of things such as the body is perceived by a network of a multitude of delusions and it is fancied to exist as a serpent in a rope.
A fascinating art project that combines AI, pareidolia and grains of sand has surfaced:
Pareidolia, a work I discovered at Meta.Morf. Trondheim Biennale for Art and Technology, uses facial recognition software to examine sand particles one by one, looking for faces in their shape. A custom-made face-detection system examines every grain of sand under the microscope. Each time a face is discovered, its portrait is automatically captured on a photo. The artists keep count of the top 100: as more grains are evaluated, the top 100 features increasingly better faces. The top 100 are shown on a round projection screen, which form alludes to the lens of the microscope.
I don't know of an earlier reference to the artificial intelligence face-recognition idea than that put forward by Nat Schachner and Leo Zagat (who often wrote together as Schachner and Zagat); these Golden Age greats described a wonderful selective electric eye in their 1931 classic Exiles of the Moon:
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Humanoid Robots Building Humanoid Robots
''Pardon me, Struthers,' he broke in suddenly... 'haven't you a section of the factory where only robot labor is employed?''