The AI agent glossary

Every term you will hear, defined in one sentence you can actually use.

AI Agent

Software that completes a task end to end, deciding the steps and using tools to act.

Large Language Model

The model that gives an agent its language understanding and reasoning ability.

LLM

Short for large language model, the reasoning core of an agent.

RAG

Retrieval Augmented Generation: answering from your data, not just the model’s training.

Retrieval Augmented Generation

Looking up relevant facts from your content before answering, to stay grounded.

Embedding

A numeric representation of text that lets an agent measure how related two things are.

Vector Database

Storage that finds the most relevant chunks of your knowledge quickly.

Prompt

The instructions that tell an agent how to behave and respond.

Prompt Engineering

The craft of writing instructions that get reliable results from a model.

System Prompt

The always-on instructions that set an agent’s role, rules and tone.

Fine-Tuning

Training a model further on your data to specialize it for a task.

Function Calling

How an agent triggers real actions in your tools by calling defined functions.

Tool Use

An agent using external systems to get work done, not just chatting.

MCP

Model Context Protocol: a standard way to give agents context and tools.

Model Context Protocol

An open standard for connecting agents to data sources and tools.

MCP Server

A service that exposes tools and data to agents over the Model Context Protocol.

Multi-Agent System

Several agents coordinating, each specialized, to handle a larger job.

Agent Orchestration

Coordinating multiple agents or steps into one reliable workflow.

Agent Memory

What an agent remembers across a conversation or over time.

Short-Term Memory

The context an agent holds within a single conversation.

Long-Term Memory

Knowledge an agent retains and recalls across sessions.

Context Window

How much text a model can consider at once when responding.

Token

The unit of text models process; usage and limits are measured in tokens.

Temperature

A setting that controls how varied or predictable a model’s output is.

Hallucination

When a model states something false with confidence; RAG and guardrails reduce it.

Guardrails

Rules that keep an agent safe, on-topic and honest.

Grounding

Tying an agent’s answers to real source data so they can be verified.

Reasoning

The model’s ability to break a problem into steps and work through it.

Planning

How an agent decides the sequence of actions to reach a goal.

Chain of Thought

A prompting approach where the model reasons step by step before answering.

ReAct

A pattern where an agent alternates reasoning and taking actions.

Autonomous Agent

An agent that can pursue a goal with minimal step-by-step human input.

Human in the Loop

Keeping a person in control of key decisions an agent makes.

Speech to Text

Turning a caller’s voice into words the agent can read.

STT

Speech to text, the input side of a voice agent.

Text to Speech

Turning the agent’s reply into natural spoken audio.

TTS

Text to speech, the output side of a voice agent.

Voice AI

Agents that hold natural spoken conversations over the phone or app.

Natural Language Processing

The field of getting computers to understand human language.

NLP

Short for natural language processing.

Natural Language Understanding

Working out what a user actually means, beyond the literal words.

Intent

What the user is trying to accomplish in a message or call.

Entity

A specific detail an agent extracts, like a date, name or amount.

OCR

Optical character recognition: reading text from scanned documents and images.

Document AI

Reading, understanding and extracting data from real-world documents.

Computer Vision

Getting models to interpret images and video.

Knowledge Base

The collection of documents an agent answers from.

Knowledge Graph

A connected map of facts and relationships an agent can reason over.

Chunking

Splitting documents into pieces so they can be embedded and retrieved.

Semantic Search

Finding results by meaning rather than exact keyword match.

Reranking

Reordering retrieved results so the most relevant come first.

Vector

A list of numbers representing the meaning of a piece of content.

Latency

How quickly an agent responds; lower is better for voice and chat.

Throughput

How much work an agent can handle in a given time.

Inference

Running a model to produce an output from an input.

Model

The trained system that produces predictions or text.

Foundation Model

A large, general model that many applications build on top of.

Frontier Model

One of the most capable current models available.

Open Source Model

A model whose weights are publicly available to run and adapt.

Multimodal

A model that works with more than one type of input, like text and images.

Agentic Workflow

A process where agents take actions across tools to reach an outcome.

Workflow Automation

Automating a multi-step process so it runs without manual work.

Trigger

The event that starts an agent or workflow.

Webhook

A message one system sends another when something happens.

API

A defined way for software systems to talk to each other.

REST API

A common style of web API using standard HTTP methods.

GraphQL

A query language that lets clients request exactly the data they need.

Integration

A connection that lets an agent work inside one of your tools.

CRM

Customer relationship management software where sales and contact data lives.

Help Desk

Software teams use to manage customer support tickets.

Ticket

A single customer request tracked in a help desk.

Ticket Deflection

Resolving a request before it becomes a ticket for your team.

Lead

A potential customer who has shown some interest.

Lead Qualification

Deciding whether a lead is worth a rep’s time and routing it.

Lead Scoring

Ranking leads by how likely they are to convert.

Pipeline

The set of deals moving toward a close.

Churn

When a customer stops using or paying for a product.

CSAT

Customer satisfaction, often measured by a short post-interaction survey.

NPS

Net promoter score, a measure of how likely customers are to recommend you.

SLA

Service level agreement: a promise about response time or uptime.

Uptime

The share of time a service is available and working.

Deployment

Putting an agent live so it starts doing real work.

On-Premise

Running software inside your own infrastructure rather than a vendor’s cloud.

Private Cloud

A cloud environment dedicated to one organization.

VPC

Virtual private cloud: an isolated section of a cloud provider you control.

Data Residency

Control over which region your data is stored and processed in.

Encryption

Encoding data so only authorized parties can read it.

Encryption at Rest

Protecting stored data by keeping it encrypted on disk.

Encryption in Transit

Protecting data while it moves between systems.

SSO

Single sign-on: logging in once to access many systems.

SAML

A standard that enables single sign-on between systems.

RBAC

Role-based access control: permissions based on a user’s role.

Audit Log

A record of actions taken, used for review and compliance.

SOC 2

A security compliance standard covering how a company handles data.

GDPR

European data-protection law giving people rights over their data.

HIPAA

US law governing the privacy and security of health information.

PCI DSS

Security standards for handling payment card data.

DPA

Data processing agreement: a contract on how a vendor handles your data.

Sub-processor

A third party a vendor uses to help deliver its service.

PII

Personally identifiable information about an individual.

PHI

Protected health information covered by HIPAA.

Data Minimization

Collecting and using only the data you actually need.

Responsible AI

Building and using AI in ways that are safe, fair and accountable.

AI Governance

The policies and controls that keep AI use responsible and auditable.

Bias

Systematic unfairness in a model’s outputs.

Explainability

How well you can understand why a model produced an output.

Evaluation

Testing an agent’s quality against known cases.

Benchmark

A standard test used to compare models or agents.

Guard Model

A model that checks another agent’s output for safety or policy.

Rate Limit

A cap on how many requests can be made in a time window.

Batch Processing

Handling many items together on a schedule rather than one at a time.

Streaming

Returning an agent’s response progressively as it is produced.

Sentiment Analysis

Detecting the emotional tone of a message.

Summarization

Condensing long content into the key points.

Classification

Sorting inputs into categories, like routing a ticket.

Extraction

Pulling structured fields out of unstructured text.

Personalization

Tailoring an agent’s responses to the individual user.

Escalation

Handing a conversation to a human when the agent should not proceed.

Handoff

Passing a conversation to a person with the full context.

Knowledge Cutoff

The date after which a base model has no built-in knowledge.

Prompt Injection

An attack that tricks an agent into ignoring its instructions.

Sandbox

An isolated environment where an agent can act safely for testing.

Cost per Conversation

What it costs to run one full agent interaction.

Time to Value

How quickly a deployed agent starts delivering results.

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