How do AI agents work?

AI agents work in a loop. They take a goal or request, gather context from memory and connected data, use a large language model to plan the next step, call tools or APIs to act, observe the result, and repeat until the task is done or a human is needed. Guardrails, permissions and approvals limit what they can do.

The agent loop

StepWhat happens
Goal“Resolve this refund request”
ContextCustomer history, policy, order data
PlanDecide the next action
ActCall a tool, e.g. check order
ObserveRead the result
Repeat or finishContinue, ask, escalate or complete

Main components

A language model for reasoning, memory, tools and integrations, instructions and guardrails, and observability.

In the enterprise

Main benefits are resolving requests end to end, working across systems, and running around the clock, with permissions and audit logs.

Frequently Asked Questions

Language

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