AI Agent Vocab 101: The Terms That Actually Matter

Smart people keep asking me the wrong questions about AI agents. Not because they're not smart — because they're missing the vocabulary. ─── I've been building AI agents that trade real money on prediction markets. And every time I explain what I'm doing to someone outside the AI bubble, I hit the same wall: they don't have the words to ask the right questions. "So it's like a bot?" Kind of. "Is it safe?" Depends what you mean by safe. "Who's in control?" That's actually the most important question — and most people can't even frame it yet. Here are the terms that changed how I think about all of this. ─── 🧠 What an AI Agent Actually Is LLM (Large Language Model) The brain. Trained on enormous amounts of text, it predicts what comes next — whether that's a word, a sentence, or a decision. GPT, Claude, Gemini: all LLMs. An LLM alone just talks. It can't do. Agent An LLM plus tools plus a loop. The defining difference: an agent can affect the world outside the conversation. It can read y