The Plain-English AI Glossary for Business Owners

Every AI term you'll actually encounter running a business, defined in plain English. No hype, and no jargon defined with more jargon.

Definitions reviewed: October 2026. Product capabilities vary by application, plan and configuration.

AEO (Answer Engine Optimization)

AEO is the work of getting your business chosen as the answer when Google or an AI answers a question directly, instead of just listing links. Ranking #1 no longer guarantees the click : often the answer box gets it. Not to be confused with the customs term "Authorized Economic Operator," which shares the acronym.

Go deeper: SEO vs. AEO vs. GEO

AI agent

Software that can work through a goal using the tools and permissions it has been given. For example, an agent may read a customer record, draft a follow-up and propose an appointment. Whether it can send or book depends on the connected tools and approval rules.

Go deeper: What is an AI agent?

AI Overview

The AI-written summary Google now shows above the regular search results for many questions. It answers the searcher directly and cites a handful of sources : being one of those sources is what AEO is chasing.

Go deeper: SEO vs. AEO vs. GEO

API (Application Programming Interface)

An interface one piece of software provides so another can request data or actions. A booking tool can use an API to create a CRM record. Some connections are custom; others are already packaged by vendors or automation platforms.

Go deeper: What is an MCP server?

Automation

Software that repeats the same fixed steps every time a trigger fires : form filled, text sent. Reliable for work that never varies, but it breaks or misfires when reality doesn't match the script. That's the line between automation and an AI agent, which can adjust.

Go deeper: What is an AI agent?

Chatbot

A conversational interface for answering questions or completing tasks. Some bots only reply with text; others have tools that book appointments or update records. Check the actual actions and permissions rather than relying on the chatbot label.

Go deeper: What is an AI agent?

Claude

Anthropic's family of AI assistants and models. Depending on the product and enabled tools, Claude can help with writing, analysis and connected work. Check the capabilities available in your particular account and application.

Go deeper: What is Claude Code?

Claude Code

Anthropic's coding agent for working with a project and its tools. It can inspect files, propose or make edits and run available commands under its permission settings. Non-coding workflows are possible too, but the tools and checks determine what it can complete.

Go deeper: What is Claude Code?

CLI / terminal

A CLI (command-line interface) is a way of running a computer by typing commands into a window called the terminal, instead of clicking buttons. Think service entrance versus lobby : same building, more access. It's where Claude Code lives, and it's less scary than it looks.

Go deeper: What is Claude Code?

Context window

The amount of information a model can use in a single request. Long sessions may be summarized, truncated or selectively retrieved by the host application. Saved files and explicit checkpoints are still useful when a task must continue later.

Go deeper: The complete AI marketing guide

Cowork

A task-oriented Claude workspace for supported desktop work. Its available integrations and local capabilities differ from a terminal-based Claude Code setup; verify the requirements of each plugin before assuming it works the same way.

Go deeper: What is Claude Code?

CRM (Customer Relationship Management)

The software that holds your customers, leads, and every conversation with them : the memory of your business. It matters here because a CRM is the tool AI agents most often read from and write to: a booked call means nothing if nothing logs it.

Go deeper: What is an AI agent?

GEO (Generative Engine Optimization)

Work aimed at improving how a business is represented in AI-generated answers. It includes accurate public information, useful source material and measurement of actual mentions. No formatting recipe guarantees that an assistant will recommend a business.

Go deeper: SEO vs. AEO vs. GEO

Hallucination

An AI response that presents unsupported or incorrect information as fact. Checking original sources, grounding answers in relevant records and reviewing consequential outputs can reduce the risk. None of those measures makes errors impossible.

Go deeper: The complete AI marketing guide

LLM (Large Language Model)

A model trained to process and generate language. Products such as Claude and ChatGPT use language models alongside other tools and application features. The quality of a product depends on that surrounding system as well as the model.

Go deeper: The complete AI marketing guide

MCP (Model Context Protocol)

An open protocol for connecting AI applications to tools and information sources through a shared interface. It can reduce repeated integration work, but clients and servers still need compatible capabilities, authentication and configuration.

Go deeper: What is an MCP server?

MCP server

A program that exposes tools or information to an MCP-compatible application. It may run locally or remotely. Access controls belong to the host, server and connected service; the protocol is not a blanket guarantee of safe or read-only access.

Go deeper: What is an MCP server?

Obsidian

A free note-taking app that stores everything as plain text files on your own computer and lets you link notes together like a personal wiki. Plain files mean you own everything : no subscription hostage, no cloud lock-in. (The app, not the volcanic glass.)

Go deeper: What is Obsidian?

Plugin

A package that can bundle skills, commands, hooks and tool configuration for a supported AI application. Installation makes capabilities available; it does not train the underlying model or grant every external permission automatically.

Go deeper: Claude skills and plugins, explained

PRD (Product Requirements Document)

A written plan that describes what you're building, who it's for, and what "done" looks like : before anyone builds anything. It used to be a software-team ritual; now it's how you brief an AI builder so you get what you wanted instead of a confident guess.

Go deeper: What is a PRD?

Prompt

Whatever you type to an AI : the question, the instruction, the brief. Prompt quality drives output quality the way a work order drives a job: vague in, vague out. Skills exist largely so your best prompts get written once and reused instead of retyped.

Go deeper: Claude skills and plugins, explained

RAG (Retrieval-Augmented Generation)

A setup where the AI looks things up in your actual documents before it answers, instead of leaning on memory alone. It's the difference between an employee who guesses and one who checks the file first : fewer hallucinations, answers grounded in your business.

Go deeper: What is Obsidian?

Second brain

A deliberately organized knowledge system for notes, research and records. Tools such as Obsidian can hold it. An AI assistant can search or summarize the material it is allowed to access, but coverage and source quality still need checking.

Go deeper: What is Obsidian?

SEO (Search Engine Optimization)

The work of getting your business ranked in Google's list of links. Thirty years old and still not dead : but it's now one of three games, alongside AEO (being the answer) and GEO (being the AI's recommendation). The good news: clear, structured, honest answers win in all three.

Go deeper: SEO vs. AEO vs. GEO

Skill

Reusable instructions and, where appropriate, supporting resources for a particular task. A skill can encode your checklist or writing style. It guides the assistant; it does not guarantee identical behavior or replace testing, review and authorization.

Go deeper: Claude skills and plugins, explained

Structured data / schema

Machine-readable labels that describe visible page content, such as an organization or article. Supported markup can help search systems interpret a page, but it does not guarantee rankings, rich results or AI citations.

Go deeper: SEO vs. AEO vs. GEO

Token

The unit AI text is measured and billed in : roughly three-quarters of a word. You'll meet it in two places: pricing pages ("$X per million tokens") and limits (a context window is measured in tokens). That's all an owner needs to know.

Go deeper: The complete AI marketing guide

Vibe coding

Building software by describing what you want in plain English and letting AI write the actual code. It's real, and it's how non-developers now get working tools built. The catch: describing what you want well is the hard part : which is why the PRD came back from the dead.

Go deeper: What is Claude Code?

Voice agent

Software that handles a conversation over the phone, sometimes with tools to qualify a caller or propose a booking. Measure completed, correct bookings and escalation quality before assuming it saves money or replaces human coverage.

Go deeper: What is an AI agent?

Webhook

A message one tool automatically sends another the instant something happens : "form submitted," "payment received." Webhooks are the tap on the shoulder that starts an automation. If an API is a doorway, a webhook is the doorbell.

Go deeper: What is an MCP server?

Workflow automation

Chaining tools together so a multi-step process runs itself: form fill → CRM entry → confirmation text → calendar hold. Platforms like Zapier, Make, and n8n do the wiring. It's fixed-steps automation, not an agent : but it's often the right first move, and agents plug into it later.

Go deeper: What is an AI agent?

Zettelkasten

A note-taking method : German for "slip box" : where every idea gets its own small note, densely linked to related notes, so ideas resurface when they're useful instead of dying in folders. It's the great-grandfather of the second-brain approach and the reason linking is Obsidian's core feature.

Go deeper: What is Obsidian?

Choose one term connected to work you already do, then test a small example before buying a new tool. If you want to discuss which workflow to start with, book a 30-minute introductory call.

Sources and implementation references

Claude skills: https://code.claude.com/docs/en/skills

MCP architecture: https://modelcontextprotocol.io/docs/learn/architecture