An Agent is an AI system that perceives its environment, makes decisions, and takes actions to achieve goals. It's autonomous. It operates without constant human direction. A basic agent has this loop: observe the environment, decide what action to take, execute the action, observe the results, repeat. The difference between an agent and a chatbot is autonomy. A chatbot answers questions you ask.
An agent sets its own goals and pursues them. Modern AI agents are LLM-based. They use language models for reasoning and decision-making. An agent can access tools, APIs, code execution, database queries. It decides which tool to use. It executes the tool. It observes the results. It plans next steps.
" It would plan: download the data, explore its structure, run statistical analysis, visualize results, summarize findings. It breaks down the high-level goal into tool calls. Each tool call returns information that informs the next decision. Agents accomplish multi-step tasks autonomously. They recover from mistakes. They adapt to unexpected situations.
The limitation is that agents are expensive, they make multiple tool calls and LLM inference, and can fail catastrophically if they misunderstand their goal or if their tools have side effects.