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AI (Artificial Intelligence)
Software that can do things which normally need human intelligence β understanding language, recognizing images, making decisions, creating content.
Machine Learning (ML)
The main way AI is built today: instead of programming rules by hand, you show the computer lots of examples and it figures out the patterns itself.
π‘ Like teaching a child to recognize dogs by showing many dog photos β not by describing "four legs, a tailβ¦"
Neural Network
The structure inside modern AI β millions of tiny connected number-calculators, loosely inspired by brain neurons. Information flows through, and the connections strengthen or weaken as it learns.
Deep Learning
Machine learning using very large neural networks with many layers ("deep"). This is what made modern AI possible after 2012.
LLM (Large Language Model)
An AI trained on massive amounts of text to understand and generate language. ChatGPT, Claude, and Gemini are all LLMs. At its core it does one thing: predict the next word β extremely well.
Token
The small chunks AI reads and writes text in β roughly a word or part of a word ("understanding" might be 2β3 tokens). AI pricing and limits are usually counted in tokens.
π‘ Like syllables for a machine β "un-der-stand-ing."
Prompt
Whatever you type (or say) to an AI. The instruction, question, or request. Writing better prompts gets better answers β that skill is called prompt engineering.
System Prompt
Hidden instructions the app gives the AI before your conversation starts β its role, rules, and personality. "You are a helpful customer support agent for X companyβ¦"
Context Window
The AI's short-term memory β how much of the conversation (in tokens) it can "see" at once. When a chat gets longer than this, the oldest parts fall out β which is why AI can "forget" what you said earlier.
π‘ Like a desk: only so many papers fit; add more, and the oldest slide off the edge.
Training
The one-time, expensive process of building a model: feeding it enormous amounts of data while it tunes billions of internal numbers until it gets good at predicting. Takes months and huge computer power.
Inference
Using the trained model β every time you ask a question and get an answer, that's inference. Fast and cheap compared to training.
Parameters
The internal numbers a model learns during training β its "knowledge dials." More parameters generally means a more capable model. Modern models have billions to trillions of them.
Transformer
The neural network design (from 2017) that powers all modern language AI. Its trick β "attention" β lets it weigh how every word relates to every other word. The T in GPT.
GPT
Generative Pre-trained Transformer: Generative (it creates text), Pre-trained (it learned from huge data beforehand), Transformer (its design). Originally OpenAI's model family; now people use "GPT" loosely for chat AI.
Hallucination
When AI confidently states something false β an invented fact, a fake citation, a wrong date. It happens because the AI predicts plausible text, not verified text. Always double-check names, numbers, and sources.
π‘ Like a confident friend who'd rather guess smoothly than say "I don't know."
Embedding
A way to turn text into a list of numbers that captures its meaning, so a computer can measure that "doctor" is close to "physician" and far from "banana." Powers AI search and recommendations.
RAG (Retrieval-Augmented Generation)
Letting an AI look things up before answering: first fetch relevant documents (your files, a knowledge base), then answer using them. This is how chatbots answer questions about your company's data without retraining.
π‘ An open-book exam instead of answering from memory.
Fine-tuning
Taking a trained model and giving it extra training on your specific examples so it speaks your style or masters your niche β cheaper than training from scratch.
Temperature
A creativity dial. Low temperature = predictable, consistent answers (good for facts and code). High = more varied and creative (good for brainstorming).
Multimodal
AI that handles more than text β it can see images, hear audio, watch video, and create them too. "Modes" = types of media.
Reasoning Model
A newer kind of model that "thinks" step by step internally before answering β like doing rough work on scrap paper first. Much better at maths, logic, and planning; slightly slower.
Chain of Thought
The step-by-step reasoning an AI writes out (or thinks through) to solve a problem. Asking an AI to "think step by step" often noticeably improves its answers.
Agent
AI that does things, not just says things. It's given tools (browser, files, email, code) and a goal, then plans, acts, checks results, and continues β often through many steps β until the job is done.
π‘ A chatbot is a knowledgeable friend on the phone; an agent is an assistant who actually goes and does the task.
Tool Calling (Function Calling)
How an AI uses external tools: instead of replying with text, it outputs a structured request like "call the weather API for Hyderabad," the app runs it, and the result is fed back to the AI. The building block of all agents.
MCP (Model Context Protocol)
An open standard that lets any AI connect to any app or data source in one common way β instead of every AI needing custom code for every tool.
π‘ Like USB-C for AI: one universal port, so anything can plug into anything.
Skills
Reusable instruction packs you give an agent β a folder of guidance, examples, and steps for a specific job ("how to review our code," "how we write reports"). The agent loads a skill when the task matches, so it does the job your way every time.
π‘ A recipe card the assistant pulls out whenever that dish is ordered.
Hooks
Automatic triggers around an agent's actions: "whenever the agent edits a file, run the tests," "before anything is deleted, ask me." Hooks make automation safe and consistent β no relying on the AI remembering.
π‘ House rules that apply automatically β the door locks itself whenever it closes.
Connector
A ready-made bridge that plugs an AI assistant into an app you use β Gmail, Google Drive, Slack, a database β so it can read and act there with your permission. Most connectors today are built on MCP.
Open vs Closed Models
Closed: you use the model through a company's service; the model itself stays private (GPT, Claude, Gemini). Open: the model's files are published so anyone can download and run it themselves (Llama, Mistral, DeepSeek). Open = more control; closed = usually the strongest capability with zero setup.
GPU
The computer chip AI runs on. Designed for video game graphics, it turned out perfect for the mass simple calculations neural networks need. This is why NVIDIA became one of the world's most valuable companies.
AGI (Artificial General Intelligence)
The hypothetical goal: AI as capable as a human at most intellectual work β able to learn any new task, not just those it was trained for. Doesn't exist yet; experts disagree on when (or whether) it will.