AI Glossary

Every term defined twice — once for clarity, once for precision.

LLM (Large Language Model)

An AI trained on huge amounts of text that can read, write, and reason in language.

Technical: A transformer-based neural network with billions of parameters trained on broad text corpora, producing next-token predictions and capable of in-context learning.

Example: Drafting a client email or summarizing a 30-page contract in seconds.

Generative AI

AI that creates new content — text, images, audio, video, code.

Technical: Models that learn the distribution of training data and sample from it to produce novel outputs (LLMs, diffusion models, multimodal models).

Example: Generating ad creative variants or proposal first drafts.

AI Agent

An AI that can plan, use tools, and complete multi-step tasks — not just answer.

Technical: An orchestrated system combining an LLM, tool/function calling, memory, planning, and human-in-the-loop checkpoints.

Example: An agent that pulls a lead from CRM, drafts an email, waits for approval, and sends.

RAG (Retrieval-Augmented Generation)

AI that answers using your own documents instead of just what it was trained on.

Technical: Indexing documents into embeddings, retrieving top-k chunks at query time, and passing them as grounded context to the model.

Example: An internal assistant that answers HR questions from your policy PDFs.

Vector Database

A database that stores meaning, not just words — so AI can find similar content.

Technical: A datastore for high-dimensional vectors with approximate nearest-neighbor search (HNSW, IVF).

Example: Pinecone or Weaviate powering a knowledge-base assistant.

Embeddings

Numerical fingerprints of text or images that capture meaning.

Technical: Dense vector representations produced by an embedding model, enabling semantic similarity search and clustering.

Example: Used to match a user's question to the most relevant SOP paragraph.

Prompt Engineering

Writing instructions that get AI to produce the right output reliably.

Technical: Designing system prompts, few-shot examples, output schemas, and tool definitions to steer model behavior.

Example: A reusable prompt that turns sales call transcripts into 3-bullet briefs.

API

A way for software to talk to other software.

Technical: A documented interface (HTTP, gRPC, SDK) exposing functions of a service for programmatic access.

Example: Using the OpenAI API to summarize support tickets in your CRM.

Automation

Letting software do work that humans used to do by hand.

Technical: Event-driven workflows that trigger actions across systems, often combining APIs, conditional logic, and AI steps.

Example: Auto-tagging incoming leads and routing them to the right rep.

Workflow

A sequence of steps to complete a task.

Technical: A directed graph of steps with triggers, conditions, parallel branches, retries, and human approvals.

Example: Quote → review → e-sign → invoice → CRM update.

Hallucination

When AI confidently makes something up.

Technical: Plausible but unfaithful outputs caused by missing grounding, decoding bias, or out-of-distribution prompts.

Example: An AI citing a court case that doesn't exist.

Model

The AI itself — the program that does the thinking.

Technical: A trained set of parameters that maps inputs to outputs (LLM, diffusion model, classifier, etc.).

Example: Choosing GPT-5 vs. Claude vs. Gemini for a workload.

Token

A small chunk of text — roughly a word or part of a word.

Technical: The atomic unit a model processes, produced by a tokenizer (BPE, SentencePiece).

Example: Pricing and context limits are measured in tokens.

Fine-tuning

Training a general AI further on your own data to make it specialized.

Technical: Supervised or preference-based updates to a base model's weights using domain-specific data.

Example: Fine-tuning on past proposals so AI writes in your firm's voice.

Multimodal AI

AI that handles more than one kind of input — text, images, audio, video.

Technical: Models with shared representations across modalities, enabling cross-modal reasoning.

Example: Asking an AI about a chart in a PDF.

AI Governance

The rules and oversight that make AI safe to use at work.

Technical: Frameworks for model risk, data classification, access control, audit trails, and regulatory alignment.

Example: A policy saying client PHI cannot be sent to public AI tools.

Human-in-the-loop

A human reviews or approves AI output before it acts.

Technical: An approval checkpoint inserted into an automated workflow, often with structured feedback capture.

Example: AI drafts a refund response; a manager approves before send.

Tool calling

When an AI uses an external tool — like a search, a database, or a calendar.

Technical: Function/tool invocation where the model emits a structured call the runtime executes and returns results into context.

Example: An agent calling your CRM API to update a deal stage.

Data privacy

Protecting the personal and confidential information you handle.

Technical: Data minimization, access control, encryption at rest/in transit, retention policies, and regulatory frameworks (GDPR, HIPAA, CCPA).

Example: Choosing tools with zero-retention policies for sensitive prompts.

AI readiness

How prepared your company is to actually benefit from AI.

Technical: A multi-dimensional assessment of data, workflows, tools, team, governance, and execution capacity.

Example: Your AI Masterwork Score™ across 10 dimensions.

Talk to us