AI Tools Glossary: 50 Terms You Need to Know in 2026

Quick Summary: AI Tools Glossary: 50 Terms You Need to Know in 2026. Updated for 2026 with the latest tools and pricing.

LLM (Large Language Model)

The technology behind ChatGPT, Claude, and Gemini. LLMs are AI models trained on billions of text examples to generate human-like text.

GPT (Generative Pre-trained Transformer)

OpenAI’s family of language models. GPT-4o is the current flagship model powering ChatGPT.

Prompt

The text input you give to an AI tool. Better prompts = better outputs. Learning prompt engineering dramatically improves results.

Context Window

How much text an AI can process at once. Claude has 200K tokens (~500 pages), ChatGPT has 128K tokens (~300 pages).

Token

The smallest unit of text an AI processes. Roughly 1 token = 0.75 words. Pricing and limits are based on tokens.

Fine-Tuning

Training an AI model on your specific data to customize its behavior. Used by businesses to create specialized AI assistants.

RAG (Retrieval-Augmented Generation)

A technique where AI retrieves relevant documents before generating answers. Used by Perplexity and enterprise AI tools.

Hallucination

When AI generates confident but incorrect information. Always fact-check important claims from AI tools.

Temperature

A setting that controls AI creativity. Low temperature = more predictable. High temperature = more creative and varied.

API (Application Programming Interface)

A way for developers to integrate AI into their own applications. Most AI tools offer APIs for custom integrations.

Multimodal

AI that processes multiple types of input: text, images, audio, video. GPT-4o and Gemini are multimodal models.

Embedding

Converting text into numbers that capture meaning. Used for search, recommendations, and finding similar content.

Diffusion Model

The AI architecture behind image generators like Midjourney, DALL-E, and Stable Diffusion.

LoRA

A technique for customizing image generation models without full retraining. Popular in the Stable Diffusion community.

Inference

Running an AI model to get a response. Faster inference = faster responses. Groq and Cerebras specialize in fast inference.