LLM (Large Language Model)
A Large Language Model predicts the most likely next token given the preceding text. Trained on massive corpora, it can write, summarise, translate and reason within limits. It has no memory between calls beyond what you put in the prompt, and it can be confidently wrong — which is why verification matters.
Token
LLMs process text in tokens, not characters or words. A token is often a word-piece; in English, ~4 characters or ~0.75 words. Pricing and context limits are counted in tokens, so prompt length directly affects cost and latency.
Prompt engineering
Prompt engineering is the craft of structuring instructions, examples and context so a model produces useful, consistent output. It includes role framing, few-shot examples, output-format constraints and decomposition. It is a real skill, not a magic phrase.
RAG (Retrieval-Augmented Generation)
RAG retrieves relevant chunks (usually from a vector database) and injects them into the prompt so the model answers from your data instead of only its training. It reduces hallucination and lets you answer questions about private or fresh content without retraining.
Embedding
An embedding turns text into a vector of numbers where semantic similarity becomes geometric closeness. Store embeddings in a vector database and you can search by meaning, not keywords — the retrieval half of RAG.
Context window
The context window is the token budget for everything the model sees in one call — system prompt, history, retrieved docs and the question. Exceed it and older content is truncated. Bigger windows help, but relevant beats large.
Temperature
Temperature scales how much randomness the model uses when sampling the next token. Near 0 gives repeatable, conservative output (good for extraction and code); higher values increase variety and creativity (good for brainstorming) at the cost of consistency.
Hallucination
A hallucination is fluent, plausible output that is simply wrong — invented facts, APIs or citations. It happens because the model predicts likely text, not truth. Mitigate with retrieval (RAG), tighter prompts, lower temperature, and — always — human verification of anything that matters.
Agent (AI)
An AI agent wraps a model in a loop where it can call tools (search, code execution, APIs), observe results and decide the next step toward a goal. More capable than a single answer, and more risky — actions need guardrails, limits and review.
MCP (Model Context Protocol)
MCP is a protocol that lets AI applications expose tools, resources and prompts to models in a consistent way — so a client can talk to many servers (files, databases, APIs) without bespoke glue for each. Think of it as a common plug for model context.