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Glossary

AI terms, explained in plain language.

Use this page when AI proposals, demos, and white papers start assuming everyone already agrees on the vocabulary. The goal is faster clarity, not more jargon.

Fast reference

Started from our long-form SMB AI guide

Know the term before you compare the vendor.

This glossary started from the terminology section inside AI for SMBs: Growth, Efficiency, and Practical Adoption in 2025 and was expanded to cover more of the language SMB owners now run into online, including chatbots, agents, reasoning models, deepfakes, MCP, RAG, vector stores, post-training, GPUs, and day-to-day automation terms.

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Core AI concepts

Start with the baseline terms that show up in almost every AI conversation.

These are the words owners and operators see first when a vendor, article, or consultant starts explaining what an AI system is actually doing.

Artificial Intelligence (AI)

Term

The broad field of building systems that can do tasks that usually require human intelligence, such as understanding language, spotting patterns, making recommendations, or solving problems.

Algorithm

Term

A step-by-step set of rules a computer follows to solve a problem or make a decision. In AI, it often means the method behind a model.

Model

Term

The trained system that takes an input and produces an output, such as a prediction, summary, answer, or classification.

Machine Learning (ML)

Term

A branch of AI where systems learn patterns from data instead of being programmed with only fixed rules.

Deep Learning

Term

A form of machine learning that uses many layers of computation to model complex patterns in text, images, audio, and other data.

Neural Network

Term

A model made of connected layers of artificial "neurons" that transform inputs into outputs. Neural networks power much of modern AI.

Large Language Model (LLM)

Term

A model trained on very large amounts of text so it can understand and generate language. ChatGPT-style systems are built on LLMs.

Reasoning Model

Term

A model designed to spend more effort working through multi-step problems, planning, or analysis before answering.

Small Language Model (SLM)

Term

A smaller language model designed to be cheaper, faster, or easier to deploy than a frontier LLM, often for narrower tasks.

Generative AI

Term

AI that creates new content, such as text, images, audio, video, or code, based on patterns learned from training data.

Multimodal AI

Term

AI that can work across more than one type of input or output, such as text plus images, or audio plus text.

Natural Language Processing (NLP)

Term

The branch of AI focused on understanding and generating human language.

Computer Vision (CV)

Term

AI techniques for understanding images and video, such as classifying, detecting, or extracting information from visuals.

Prompts, agents, and generation

This is the language behind how people actually use generative AI day to day.

If you are hearing terms like agentic AI, context window, hallucination, or tool calling, they usually belong in this layer.

Prompt

Term

The instruction or input you give an AI system, such as a question, request, or block of reference text.

System Prompt

Term

The higher-priority instruction layer that tells an AI assistant how it should behave before the user starts asking questions.

Prompt Engineering

Term

The practice of improving prompts, instructions, and context so a model produces more reliable output.

Token

Term

A unit of text a model processes internally. Tokens are how most AI APIs measure context size, usage, and cost.

Context Window

Term

The amount of information a model can consider at once in a single request, including the prompt, chat history, and attached context.

Inference

Term

Using a trained model to generate an output or prediction on new input.

Temperature

Term

A setting that controls how predictable or varied a model's output will be. Lower temperature is usually steadier; higher temperature is usually more creative.

Hallucination

Term

When an AI system states something confidently that is wrong, unsupported, or fabricated.

Grounding

Term

Giving a model trusted source material or live business context so its answers stay tied to real information instead of guesswork.

AI Agent

Term

An AI system that does more than answer once. It can decide on steps, use tools, pull context, and complete a task with less human guidance.

Agentic AI

Term

A style of AI product design where the model acts more like an active worker or assistant than a single-turn chatbot.

Copilot / AI Assistant

Term

A more guided AI experience that helps a person work faster without fully taking over the workflow.

Chatbot

Term

A conversational AI interface that answers questions or guides users through tasks in chat, web, text, or voice channels.

Tool Calling

Term

A model capability that lets the AI choose and invoke external tools, APIs, calculators, or business systems as part of an answer.

Human-in-the-Loop

Term

A workflow where a person reviews, approves, or corrects AI output before it triggers an important next step.

Retrieval and business context

This is the vocabulary for giving an AI assistant access to your actual business knowledge.

Much of the current AI jargon online is really about one question: how do you connect a model to your documents, systems, and facts without retraining it from scratch?

Knowledge Base

Term

A curated collection of business information, such as FAQs, policies, product docs, SOPs, or help-center articles, that an AI system can reference.

Retrieval-Augmented Generation (RAG)

Term

A pattern where the system first retrieves relevant information from a knowledge base, then asks the model to answer using that material.

Knowledge-Augmented Generation (KAG)

Term

A broader family of approaches that enrich generation with structured knowledge, often using curated facts or a knowledge graph. The label is less standardized than RAG, but the goal is the same: make answers more grounded.

Embedding

Term

A numerical representation of meaning. Embeddings let systems compare whether two pieces of text are similar, even if they use different words.

Vector

Term

The list of numbers produced by an embedding model that captures the meaning of text, images, or other content in machine-readable form.

Vector Store / Vector Database

Term

A database optimized for storing embeddings and finding the most semantically similar items quickly.

Chunking

Term

Breaking long documents into smaller sections so they can be embedded, stored, retrieved, and cited more effectively.

Metadata

Term

Extra structured information about a file or record, such as source, date, product line, customer segment, or document type.

Re-ranking

Term

A second pass that reorders retrieved results so the most useful or most relevant sources are shown to the model first.

MCP (Model Context Protocol)

Term

A standard way for AI applications to discover and use tools, files, and external systems. In plain terms, it helps models work with business context more safely and consistently than copying everything into a prompt.

Models and training

This is where the jargon shifts from product usage to how the model itself was built or adapted.

Even if an SMB will never train a model from scratch, these terms appear constantly in pricing pages, model cards, launch posts, and vendor claims.

Foundation Model

Term

A large model trained on broad data that can be adapted to many downstream tasks instead of being built for only one narrow job.

Pre-trained Model

Term

A model that has already learned general patterns from a large dataset and can be reused or specialized instead of trained from scratch.

Open Source Model

Term

A model whose code, weights, or both are publicly available under a license that lets others inspect, use, or modify it.

Proprietary Model

Term

A closed model controlled by a company that does not publish all of the model internals or weights for outside use.

Pre-training

Term

The initial large-scale training stage where a model learns broad patterns from huge datasets before it is adapted for more specific use cases.

Post-training

Term

The improvement stage after pre-training, where a model is tuned to behave better, follow instructions, or become safer and more useful.

Fine-tuning

Term

Continuing training on narrower data so a model performs better for a specific task, company, or domain.

LoRA (Low-Rank Adaptation)

Term

A lightweight way to fine-tune a model by changing a smaller set of trainable components instead of updating every weight.

Distillation

Term

Training a smaller model to imitate the behavior of a larger one so it can be cheaper and faster to run.

Quantization

Term

Compressing a model so it uses less memory and compute, usually with some trade-off between speed, cost, and quality.

Model Weights

Term

The learned numerical values inside a model that store what it has absorbed during training.

Model Parameters

Term

The internal variables a model learns during training. Parameter count is often used as a rough way to describe model size.

Data, integrations, and automation

These are the terms that connect AI to everyday business systems and operations.

Owners usually care less about the raw model than whether it can work with documents, APIs, CRM records, forms, inboxes, and repetitive workflows.

Structured Data

Term

Data organized into defined fields and rows, like spreadsheets, CRM tables, or database records.

Unstructured Data

Term

Data without a fixed schema, such as emails, PDFs, call recordings, images, or free-form notes.

Training Data

Term

The data used to teach a model during training or fine-tuning.

Synthetic Data

Term

Artificially generated data designed to resemble real data for training, testing, or privacy-sensitive use cases.

ETL (Extract, Transform, Load)

Term

The process of collecting data from one system, cleaning or reshaping it, and loading it into another system for analysis or application use.

Data Warehouse

Term

A central store for cleaned, structured business data used for reporting, analytics, and decision-making.

Data Lake

Term

A storage layer that can hold large amounts of raw structured and unstructured data before it is fully organized.

API (Application Programming Interface)

Term

A defined interface that lets one system send requests to another system and get structured responses back.

SDK (Software Development Kit)

Term

A package of tools, code, and documentation that makes it easier for developers to build on top of an API or platform.

Webhook

Term

An automatic event notification sent from one system to another when something happens, such as a lead being created or a payment succeeding.

OCR (Optical Character Recognition)

Term

Technology that turns text in scanned documents, screenshots, or images into machine-readable text.

RPA (Robotic Process Automation)

Term

Software automation that mimics repetitive computer actions like clicking, copying data, or moving information between systems.

Workflow Automation

Term

Using software to move a process forward automatically, such as routing leads, answering standard questions, creating tickets, or syncing records.

Workflow

Term

The sequence of steps a business process follows from start to finish. In AI discussions, this usually means where the model fits inside a real operational process.

Orchestration

Term

Coordinating multiple steps, systems, or tools so a larger workflow runs in the right order.

PII (Personally Identifiable Information)

Term

Information that can identify a real person, such as name, phone number, email address, social security number, or account details.

Infrastructure and performance

This is the vocabulary around what powers AI systems and what affects speed, cost, and reliability.

When vendors talk about compute, GPUs, latency, or data centers, they are describing the operational layer behind the experience your team actually sees.

Compute

Term

The processing power needed to train or run models, often measured by how much math the hardware can perform.

Cloud Computing

Term

Renting servers, storage, and AI services over the internet instead of owning the infrastructure yourself.

On-Premise

Term

Infrastructure operated inside your own environment instead of rented from a cloud provider.

Edge Computing

Term

Running models near where data is created, such as on phones, sensors, or local devices, to reduce latency or avoid constant cloud calls.

CPU (Central Processing Unit)

Term

The general-purpose processor found in most computers and servers. CPUs handle a wide range of work but are not always the fastest option for modern AI workloads.

GPU (Graphics Processing Unit)

Term

A processor built for parallel math-heavy workloads. GPUs are the standard hardware for training and serving many AI models.

TPU (Tensor Processing Unit)

Term

Google's specialized hardware for tensor operations used in deep learning.

NPU (Neural Processing Unit)

Term

A chip designed specifically for AI tasks on devices such as laptops, phones, or edge hardware.

Data Center

Term

A physical facility full of servers, storage, networking equipment, and power systems used to run cloud services and large-scale software workloads.

Latency

Term

How long it takes for a system to respond after a request is made.

Throughput

Term

How much work a system can handle over time, such as requests per second or documents processed per hour.

Rate Limit

Term

A usage cap that restricts how many requests a user or system can send in a given time period.

Uptime

Term

The amount of time a service remains available and working as expected.

SLA (Service Level Agreement)

Term

A formal commitment about reliability, availability, or response targets made by a vendor to a customer.

Trust, evaluation, and risk

This is the language that matters when the question becomes whether an AI system is safe enough to use in production.

The model output matters, but so do the controls, tests, and governance around how the system behaves with real customers and real business data.

Bias

Term

Systematic error that leads a model to perform unfairly or less accurately for certain groups, contexts, or data patterns.

Explainability

Term

How understandable a model's output or decision process is to humans.

Overfitting

Term

When a model learns the training data too closely and performs worse on new, unseen examples.

Cross-Validation

Term

A testing method that repeatedly splits data into training and evaluation subsets to check whether performance is consistent.

Accuracy

Term

The percentage of predictions that were correct overall.

Precision

Term

Of the predictions the model labeled positive, the share that were actually correct.

Recall

Term

Of the real positive cases, the share the model successfully found.

Eval (Evaluation)

Term

A structured test used to check whether a model or AI workflow performs well enough for a real use case.

Benchmark

Term

A standardized test or score used to compare model performance across systems.

Red Teaming

Term

Stress-testing an AI system by trying to break it, exploit it, or expose unsafe behavior before real users do.

Prompt Injection

Term

A technique for manipulating an AI system by slipping in malicious or conflicting instructions through user input, retrieved content, or connected tools.

Deepfake

Term

AI-generated or AI-altered media, often audio or video, designed to look or sound like a real person or event.

Guardrails

Term

Rules, checks, or safety layers added around an AI system to reduce harmful, unsafe, or off-policy output.

Privacy

Term

How personal or sensitive information is collected, stored, shared, and protected when AI systems are used.

Compliance

Term

Meeting the legal, contractual, or industry-specific requirements that apply to how data and AI systems are handled.

Responsible AI

Term

The practice of developing and using AI in ways that are fair, safe, transparent, accountable, and aligned with user rights.

AI Governance

Term

The policies, controls, and accountability structures an organization uses to guide how AI is built, approved, monitored, and updated.

Keep going

Use the term, then move into the page that matches the workflow.

The glossary is the fast reference. The next click should usually be the product, pricing, security, integrations, or custom AI page that fits the topic you are evaluating.

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