AI lab (model provider)
A company that trains and serves models. Anthropic makes Claude. OpenAI makes GPT and Codex. Google makes Gemini. Meta makes Llama. Mistral, DeepSeek and Alibaba (Qwen) also publish models.
Why it matters: Each has its own prices, terms, regions and strengths. Clients often already have a contract with one, which can decide your choice.
Model family and version
Providers release models in families and versions. Claude, for example, comes as Opus, Sonnet and Haiku, from most capable to fastest and cheapest. Old versions are retired over time.
Why it matters: Pin the exact model name in your code so results do not change underneath you, and plan for upgrades.
Claude
The name of Anthropic's family of models, and also of the Claude app (web, desktop and mobile) where people chat with those models.
Why it matters: Because one word means two things, always clarify: the app people use, or the model called from a system through the API.
Chat app
A finished product for people: you type, it answers. Examples: the Claude app, ChatGPT, Gemini, Microsoft Copilot. Sold as individual, team and enterprise plans.
Why it matters: Excellent for research, drafting and learning. It is not how you build an automated process that runs without a person typing.
API
Application Programming Interface: an agreed way for one program to ask another for data or actions over the network.
Think of it like: A restaurant's order window. You hand in an order in the agreed format and get your food back; you never go into the kitchen.
Why it matters: Everything you build talks to a model, and to the client's systems, through APIs.
Anthropic API (Claude API)
The developer service for calling Claude models from your own code, paid per token, using an API key from the Claude Console. Claude models are also offered through Amazon Bedrock, Google Cloud Vertex AI and Microsoft Foundry.
Why it matters: This is how a POC uses Claude inside a client process: your code sends the document and instructions, and gets structured results back.
Not the same as: The Claude app is a product for people chatting. The API is a service for programs. Same models, but different billing, different controls and often different data terms.
SDK
Software Development Kit: a library that makes an API easy to call from a language such as Python or TypeScript. Anthropic, OpenAI and Google all publish official SDKs.
Why it matters: Use the official SDK. It handles details such as retries and request formats so you write less code.
API key
A secret string that identifies your account when you call an API.
Why it matters: Anyone holding it can spend your money and reach whatever it can reach. Never put keys in code, chats, documents or screenshots.
Cloud model platforms
Large clouds resell models inside their own accounts: Amazon Bedrock, Google Vertex AI and Microsoft Azure AI Foundry.
Why it matters: Enterprises often must use their existing cloud for billing, security reviews, private networking and data residency.
Prompt and system prompt
The prompt is everything you send: instructions, data, examples and the question. The system prompt is the builder's standing instructions for the whole conversation: role, rules and output format.
Why it matters: Most quality gains on a POC come from clearer prompts, not from a different model.
Harness
The software around a model that turns it into a working tool. It builds the prompt, keeps the conversation, offers tools, runs them when the model asks, and decides when to stop.
Think of it like: The model is the engine. The harness is the rest of the car: steering, brakes, dashboard.
Why it matters: Two products using the same model can behave very differently because of their harness. Claude Code, Codex, Cursor and your own agent code are all harnesses.
Tool use (function calling)
A way for the model to ask the harness to run something: search, read a file, call an API. The model only asks; your code decides whether to run it and sends back the result.
Why it matters: This is how an LLM touches real systems, so it is where permissions and approvals matter most.
Agent
A model working in a loop: plan, use a tool, look at the result, continue, until the task is done.
Why it matters: Powerful but harder to predict and test. Use a simple fixed workflow when that is enough.
MCP (Model Context Protocol)
An open standard for connecting AI applications to tools and data. A system is exposed once as an MCP server, and any app that supports MCP can use it.
Think of it like: A USB-C port for AI tools: one plug shape that many devices understand.
Why it matters: Lets a client connect their systems once and reuse them across AI tools, instead of building a custom integration for each.
Coding agent
A harness for software work. It reads your repository, edits files, runs tests and commands. Examples: Claude Code (Anthropic), Codex (OpenAI), Gemini CLI (Google), Cursor and GitHub Copilot.
Why it matters: The fastest way to build a POC, as long as you review every change and understand what it ran.