Definition
An AI agent is software that uses a language model to choose and take actions, such as searching, reading files or updating systems, to finish a task.
AI agent explained
Most AI agents combine four parts:
- A language model that reasons about the task and decides the next step.
- Tools the agent can call, such as web search, a CRM, a spreadsheet, email or an internal API.
- Memory or context: the instructions, the conversation so far and relevant documents.
- A loop that runs the model, executes the chosen tool, feeds back the result, and repeats until the task is done.
The difference from a simple chatbot is action. A chatbot can tell you how to update a record; an agent can update it. That makes agents powerful and also raises the stakes: permissions, audit logs, spending limits and approval steps become part of the design.
AI agents also browse the web on behalf of users, reading product pages, comparing options and even completing purchases. Sites that are fast, clearly structured and readable without complex scripts are easier for these agents to use.
Example
Your operations manager asks an AI agent to find every supplier invoice from last month that doesn't match a purchase order. The agent searches the inbox, reads each invoice, checks the accounting system and returns a list of mismatches with links, instead of just explaining how to do it.
Why it matters
Agents can complete tasks rather than just advise on them, which opens up automation that rule-based tools couldn't handle.
Related service
Agentic AI Tools
Custom AI agents and automations that connect to your data and tools, with a human in the loop.
Custom agentic AI toolsPublished by Vidern, founded and led by Malhar Shah. Updated .
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Related terms
- Agentic AIAgentic AI is AI that works toward a goal over several steps, deciding what to do next and using tools such as search, databases and apps.
- Tool callingTool calling lets a language model ask software to run a function, such as a search, calculation or database update, and then use the result.
- LLM (Large Language Model)An LLM (large language model) is an AI model trained on huge amounts of text to generate language, such as the models behind ChatGPT, Claude and Gemini.
- Human in the loopHuman in the loop is designing an AI system so a person reviews, approves or corrects its work at key points, instead of letting it act fully on its own.
- Context windowA context window is the most text, measured in tokens, that a language model can consider at once, including instructions, documents and its reply.