If you only have 30 minutes, read these. Every other AI term you'll meet in a product doc, a launch post, or a boardroom is a recombination of ideas in this list.
LLM (large language model)
A neural network trained on huge volumes of text that predicts the next token. Every chatbot, coding copilot, and AI writing assistant is built on one. Examples: GPT-5, Claude Opus 4.6, Gemini 2.5 Pro, Llama 4, DeepSeek V3.
Token
The unit a model reads and writes. Roughly 4 characters or 3/4 of a word in English. All pricing, context limits, and latency scale with tokens, not characters or words.
Context window
How many tokens the model can see at once, your prompt, the document, chat history, retrieved snippets. Frontier models in 2026 run 200K-2M tokens. Hit the limit and earlier content silently falls off the edge.
Prompt
The instruction you give the model. The entire discipline of prompt engineering is about being specific enough to collapse the response distribution onto the answer you actually wanted.
System prompt
A prompt set by the app, not the user, that shapes every response, tone, format, constraints, persona. Most product magic lives here.
Embedding
A numeric fingerprint of text (or image, or audio). Similar meaning sits close in vector space. Embeddings are the backbone of semantic search and RAG.
RAG (retrieval-augmented generation)
Fetch relevant documents from your data, stuff them into the prompt, let the model answer with citations. The dominant pattern for grounding AI in proprietary data.
Fine-tuning
Continuing training on your own examples to bake behavior into the weights. Cheaper than pretraining, slower and more rigid than prompting. Used when prompts can't get the behavior consistent.
Reasoning model
A model that spends compute on an internal chain of thought before answering. Examples: OpenAI o-series, Claude extended thinking, Gemini Thinking, DeepSeek R1. Better at math and code; slower and pricier.
Agent
An LLM in a loop with tools, deciding its own next step until the goal is met. Flexible, unpredictable, expensive. Not every AI feature is an agent, most shouldn't be.
Tool use / function calling
A model returning a structured call (run this SQL, hit this API) that your code executes, with the result fed back in. The substrate beneath every agent.
Multimodal
One model that handles text, images, audio, and sometimes video in a unified way. GPT-5, Claude Opus 4.6, Gemini 2.5, Grok 4 are all multimodal.
Hallucination
A confident, fluent, wrong answer. A structural property of how LLMs generate, not a bug to be fully eliminated. Mitigated with RAG, grounding, citations, and verification, not prompting alone.
Mixture of Experts (MoE)
An architecture where only a subset of the model's weights activate per token, letting giant models run at a fraction of their compute cost. Behind Mixtral, DeepSeek V3, GPT-4o, Llama 4, and most frontier serving.
Diffusion model
The image/video architecture: start with noise, iteratively denoise into a coherent output. Midjourney, Stable Diffusion, Sora, Veo 3, Flux, Runway.
Temperature
A dial on model randomness. 0 is deterministic-ish and boring. 1 is creative and unstable. Most production systems sit at 0.2-0.7 depending on task.
Fine-grained control terms (top-p, top-k)
Alternative sampling controls that cap the set of next-tokens the model picks from. Rarely worth tuning unless you're squeezing a bespoke use case.
Prompt injection
A security class where untrusted input (a user message, a scraped page, an email) smuggles instructions that hijack the model. The defining unsolved AI security problem of 2024-2026.
Inference
Running a trained model to produce an output. Distinct from training. Most of what you pay cloud providers for is inference cost.
Distillation
Training a smaller student model to mimic a bigger teacher. How frontier capability gets compressed into the cheap, fast models you actually ship with.