AI Fundamentals·Lesson 4

Essential AI Terminology

A clear glossary of terms you'll encounter throughout this course and in everyday AI use.

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Model & Architecture Terms

LLM (Large Language Model) — An AI model trained on text data. Examples: GPT-4, Claude, Gemini.

Parameters — The internal numbers the model adjusts during training. More parameters generally means more capability. GPT-4 has over 1 trillion parameters.

Weights — The specific values of parameters after training. When people say "open-weight model," they mean the trained model is publicly available.

Neural Network — The architecture behind deep learning. Layers of interconnected nodes that process information, loosely inspired by the brain.

Transformer — The specific neural network architecture that powers all modern LLMs. Introduced in the 2017 paper "Attention Is All You Need."

Input & Output Terms

Prompt — The input you give to an AI model. Can be a question, instruction, or any text.

Completion — The model's response to your prompt.

Token — The basic unit LLMs process. Roughly 0.75 words.

Context Window — The maximum number of tokens the model can process at once (input + output).

System Prompt — Hidden instructions that set the model's behavior before the user's message. Used by developers to customize AI behavior.

Temperature — A setting controlling response randomness (0 = deterministic, 1+ = creative).

Top-p (Nucleus Sampling) — Another randomness control that limits token choices to the most probable options.

Training & Data Terms

Training Data — The text corpus used to train the model. GPT-4 was trained on a large portion of the internet.

Fine-tuning — Additional training on a specific dataset to specialize a model for particular tasks.

RLHF (Reinforcement Learning from Human Feedback) — A training technique where humans rate model outputs to teach the model to be more helpful and less harmful.

Knowledge Cutoff — The date after which the model has no training data. It won't know about events after this date.

Hallucination — When an AI generates plausible-sounding but incorrect information. A major limitation of all current LLMs.

Grounding — Techniques to reduce hallucination by connecting the model to real data sources (search, databases, documents).

Application Terms

RAG (Retrieval-Augmented Generation) — A technique where the model searches a knowledge base before responding, reducing hallucination.

API (Application Programming Interface) — A way for developers to access AI models programmatically, enabling AI-powered applications.

Agent — An AI system that can take actions autonomously — browsing the web, running code, calling APIs — not just generating text.

MCP (Model Context Protocol) — A standard for connecting AI models to external tools and data sources.

Multimodal — A model that can process multiple types of input (text, images, audio, video).

Embedding — A numerical representation of text that captures its meaning. Used for search, similarity, and classification.

Practice This

As you encounter new AI terms in the wild, try asking Claude or ChatGPT to explain them. A great prompt: "Explain [term] like I'm a smart person who's new to AI. Give me the practical implication, not just the definition."

Try this on ChatGPT, Claude, or Gemini

Key Takeaways
  • Tokens, context windows, and temperature are the most practically important terms
  • Hallucination is a key limitation — always verify important AI outputs
  • RAG and agents are the two most important AI application patterns
  • Understanding these terms helps you use AI tools more effectively

Test Yourself

Q1What is a hallucination in AI context?
When an AI generates plausible-sounding but factually incorrect information. All current LLMs can hallucinate.
Q2What does RAG stand for and why does it matter?
Retrieval-Augmented Generation. It reduces hallucination by having the model search real data before responding, rather than relying only on training data.
Q3What is an AI agent?
An AI system that can take autonomous actions (browsing web, running code, calling APIs) rather than just generating text responses.