Reference

AI Agent Glossary

Plain English definitions of the terms you will encounter when evaluating, deploying, and operating AI agents for your business.

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A
Agentic Loop
The repeating cycle of an AI agent perceiving input, reasoning about it, taking an action, and evaluating the result.
AI Agent
A software system that perceives its environment, makes decisions, and takes actions to achieve specific goals — without requiring human input for each step.
API (Application Programming Interface)
A set of rules that allows different software systems to communicate, enabling AI agents to interact with external services.
Audit Log
A chronological record of all actions taken by an agent, including what data was accessed, what changes were made, and when.
Autonomous Agent
An AI agent that operates independently, making decisions and executing tasks without constant human supervision.
C
Circuit Breaker
A design pattern that stops an agent from repeatedly attempting a failing operation, protecting both the agent and external systems.
Context Window
The maximum amount of text an LLM can process in a single interaction, which determines how much information an agent can consider at once.
D
Deployment
The process of making an AI agent operational in a production environment where it handles real tasks.
E
Escalation
The process by which an AI agent transfers a task to a human when it encounters a situation outside its capabilities or confidence threshold.
F
Fine-Tuning
The process of further training a pre-trained LLM on specific data to improve its performance on particular tasks.
Function Calling
A capability that allows LLMs to trigger specific actions or retrieve data from external systems in a structured way.
H
Hallucination
When an AI model generates information that is factually incorrect or fabricated, often stated with apparent confidence.
I
Integration
A connection between an AI agent and an external tool or service, allowing the agent to read data from or write data to that system.
K
Knowledge Base
A structured repository of information that an AI agent can search to find relevant content when answering questions or completing tasks.
L
Latency
The time delay between an agent receiving input and producing output or completing an action.
LLM (Large Language Model)
The underlying AI model that powers most modern AI agents, enabling them to understand and generate natural language.
M
Multi-Agent System
A network of AI agents that collaborate or specialize to complete tasks that a single agent could not handle alone.
O
Orchestration
The coordination of multiple AI agents or agent steps to complete a complex, multi-stage workflow.
P
Prompt Engineering
The practice of designing and refining the instructions given to an AI agent to improve its performance on specific tasks.
R
RAG (Retrieval-Augmented Generation)
A technique where an AI agent retrieves relevant information from a knowledge base before generating a response.
Rate Limit
A restriction on how many API requests can be made in a given time period, which can affect agent performance at scale.
RBAC (Role-Based Access Control)
A security model that restricts system access based on a user's role within an organization.
Retry Logic
Automated rules that cause an agent to try a failed action again, often with exponential backoff to avoid overwhelming external systems.
S
Semantic Search
A search method that finds results based on meaning and context rather than exact keyword matches.
SLA (Service Level Agreement)
A commitment to a specific level of performance or availability, such as 99.9% uptime or response within 5 minutes.
T
Token
The basic unit of text that LLMs process — roughly 4 characters or 0.75 words in English.
Tool Use
The ability of an AI agent to interact with external services, APIs, and software — such as sending emails, updating a CRM, or reading a calendar.
V
Vector Database
A specialized database that stores and retrieves information based on semantic similarity, commonly used with RAG systems.
W
Webhook
An automated message sent from one application to another when a specific event occurs, often used to trigger agent actions.
Workflow Automation
The use of software to automatically execute a sequence of tasks according to predefined rules or triggers.

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