# AI Basics You MUST Understand Before Building AI Agent > Source: > Published: 2026-05-21 22:55:00+00:00 Many developers are jumping directly into AI agent frameworks like: But without understanding the foundations first, things quickly become confusing. Concepts like: are the real building blocks behind modern AI systems. So in this tutorial, I simplified the core AI concepts every beginner should understand before building AI agents. LLM stands for Large Language Model. Models like ChatGPT, Claude, and Gemini are all LLMs trained on massive amounts of text. They learn language patterns and predict likely next words. Example: Input: “The sky is…” Prediction: “blue” Modern AI agents use LLMs as their reasoning engine. AI models do not process text exactly like humans. Instead, text is split into smaller units called tokens. Example: “AI agents are powerful” Could become: Every model has token limits, which affect: A context window is the amount of information an AI model can process at one time. Think of it like short-term memory. If conversations become too long, older information may disappear from context. This is why memory systems are important in AI agents. Embeddings convert text into numerical representations. The key idea: similar meanings become mathematically close together. Example: Different words… similar meaning. Embeddings power: RAG stands for Retrieval-Augmented Generation. Instead of relying only on training data, the AI can retrieve external information before answering. Example: This is how many modern AI assistants work. APIs allow systems to communicate. AI agents constantly use APIs for: Understanding APIs is essential for AI engineering. Modern AI agents combine all these systems together: Understanding the fundamentals makes advanced frameworks much easier to learn. I also created: 📺 Video: https://youtu.be/y8DOp4SAT5g?si=qZm7QpA5qEA_kfGp 💻 GitHub: https://github.com/yisakberhanu/ai-agents-course Would love feedback from other developers building AI systems.