Know your AIs from your LLMs with our beginners’ guide to AI talk.

Agent: Think of an AI agent as a ‘smart assistant’ for a specific task. While a simple chatbot is an agent for customer service, a more advanced AI agent could be a tool that manages your social media. It perceives what’s trending and your brand’s style, then acts by drafting and scheduling posts for you. This frees you up from a time-consuming, repetitive task.

AI (artificial intelligence): At its core, AI is about using technology to do things that would normally require a human to think or decide. For a small business, this isn’t science fiction. It’s the technology behind tools that help you with marketing, customer service, or data analysis. They help you work smarter and more efficiently, even with a small team.

Algorithm: An algorithm is simply the set of instructions that an AI follows. For your business, this is the ‘recipe’ that an AI tool uses to get the job done. For example, a social media tool uses an algorithm to decide what content to show your followers, or an accounting app uses an algorithm to automatically categorise your expenses.

ANI (artificial narrow intelligence): This is the kind of AI you’re using today. It’s a tool that’s brilliant at one thing, like a chatbot that answers customer questions or a design tool that generates a logo. It can’t do anything else, but it’s a powerful and specialised tool that can give your business a competitive edge.

Bias: AI bias is when an AI tool makes unfair or incorrect decisions because its training data was not a good representation of the real world. For a small business, this is a risk you need to be aware of, especially if you’re using AI for hiring or marketing. For example, an AI tool might favor a certain gender or demographic in job applications if it was only trained on resumes from one group.

Big data: This term refers to the massive and complex amounts of data that are too large for standard software to analyse. While you might not deal with ’big data’ yourself, the AI tools you use, like a marketing analytics platform or a content generator, are built and trained using it. They use this huge dataset to find patterns that help them give you better results.

Chatbot: A chatbot is an AI tool that can have simple conversations with customers, usually through text on your website or social media. It’s perfect for a small business because it can handle common questions and simple requests 24/7, freeing up your time to focus on more complex customer issues.

Generative AI (genAI): A type of artificial intelligence that creates new, original content rather than just analysing or identifying existing data. It does this by learning the underlying patterns, structures, and relationships from a massive training dataset. Based on the patterns it has learned, it can then generate new text, images, audio, or other media in response to a user’s prompt.

Hallucination: This is a term for when a generative AI confidently makes up facts or details that are completely false. For your business, this means you should always double-check any information you get from an AI tool. Don’t use AI-generated content for important legal, financial, or factual information without a human review.

LLM (large language model): This is the technology behind popular tools like ChatGPT and Gemini. It’s a very advanced type of AI that understands and generates human language. You can use an LLM for everything from brainstorming ideas for your next blog post to writing a customer service email in a specific tone.

ML (machine learning): Machine learning is the process where a computer learns from data without being explicitly programmed. In a small business context, this is how a tool gets better over time. For example, a website’s recommendation engine uses machine learning to get smarter about what products to show a customer after every purchase they make.

Model: In AI, a ‘model’ is the finished product of the machine learning process. It’s the algorithm that has been trained to do a specific task, like recognising faces or writing marketing copy. When you use an AI tool, you’re using a trained model.

NLP (natural language processing): NLP is the technology that allows computers to understand, interpret, and produce human language. It’s what makes your chatbot or voice assistant work. For a small business, NLP is crucial for any tool that interacts with customers using natural conversation.

Prompt: A prompt is the instruction or question you give to a genAI. For your business, a good prompt is the key to getting a good result. For example, instead of just saying, “Write a social media post,” a good prompt would be, “Write a social media post for our new coffee product that’s aimed at young professionals in a casual, friendly tone.”

Prompt engineering: This is the skill of writing great prompts to get the best possible output from an AI. It’s less about being a programmer and more about knowing how to give clear, detailed instructions. Mastering this can help you and your employees use AI tools much more effectively for everything from writing product descriptions to planning a marketing campaign.

Reasoning: AI reasoning is the ability for an AI to draw conclusions and make decisions based on its knowledge. While current AI isn’t a true ’reasoner’ like a human, you can use tools with this capability to analyse your sales data and suggest the best days to run a promotion.

Training data: This is the information used to teach an AI model what to do. For a small business, the quality of this data is vital. If your AI tool for analysing customer feedback is only trained on positive reviews, it won’t be able to properly identify negative sentiment in new feedback.