AI strategy consulting

Your 5 Minute AI Cheat Sheet for Business

Ryan Flanagan
Jan 14, 2025By Ryan Flanagan

Your 5 Minute AI Cheat Sheet for Business

AI jargon can feel overwhelming. Terms like AGI, LLM, or diffusion models are thrown around constantly, leaving many of us unsure about what they mean. If you’ve ever nodded along in conversations without fully grasping the details, you’re not alone. This guide is here to help simplify the confusion and make AI more approachable.

Artificial intelligence is everywhere, with businesses touting it as the next big thing. From chatbots to image generators, AI seems to touch every aspect of life. Yet, the language surrounding it often feels like a wall between everyday users and practical understanding. Complex terms, technical explanations, and buzzword-laden marketing campaigns only add to the problem.

Take terms like "foundation models" or "frontier models"—th

ey sound groundbreaking, but for many, they lack clarity. Then there’s the fear of making mistakes with AI or the unease about its biases and inaccuracies. With so much uncertainty, it’s easy to feel left behind.

Here’s the good news: you don’t need to be an expert to understand AI. Let’s break it down into simple concepts.

What is AI?

At its core, artificial intelligence is about teaching computers to think and act in ways that mimic humans. Companies often use the term loosely, but AI fundamentally revolves around making machines “smarter” by training them to process and respond to data.

Here are some key terms to understand:

  • Artificial Intelligence (AI): The broader field focused on creating intelligent systems that can solve problems, make decisions, or understand human-like tasks.
  • Machine Learning (ML): A subset of AI where computers are trained on data to recognise patterns and make predictions.
  • Generative AI: Tools like ChatGPT or Google’s Gemini that create new content—whether it’s text, images, or even code—based on large amounts of data.
  • Artificial General Intelligence (AGI): Hypothetical AI that’s as smart as a human. This is still theoretical but could fundamentally change how we work and live.
  • Bias: A persistent challenge in AI, where systems reflect the biases found in their training data, often leading to skewed or unfair results.
  • Hallucinations: When AI tools confidently generate incorrect or nonsensical information, due to limitations in their training data.
     

    What Are AI Models?

AI models are essentially systems trained to perform tasks. They underpin most of the AI tools we use today. Here’s a quick overview of the key types:

  • Large Language Models (LLMs): AI systems like GPT or Claude that excel in generating or understanding text. They’re what power many popular tools.
  • Diffusion Models: These models generate images (or other media) by adding and removing noise from data, helping to create clear and detailed outputs.
  • Foundation Models: Built on vast datasets, foundation models form the basis for multiple applications without needing further training for specific tasks. Examples include OpenAI’s GPT or Meta’s Llama.
  • Frontier Models: A marketing term for next-generation AI models that promise greater capabilities but also raise ethical and safety concerns.


These models are what make AI tools possible, from generating content to recognising patterns in data.

 
Why Should This Matter to You?

AI isn’t going anywhere—it’s becoming a bigger part of how businesses operate and how individuals work. Understanding these terms equips you to have clearer conversations, make better decisions, and explore how AI might help in your own life or business.

If you’re wondering where to start, here are a few tips:

  1. Focus on practical applications. What tasks in your life or work could AI simplify?
  2. Test out tools like ChatGPT or image generators. Hands-on experience often makes concepts clearer.
  3. Read case studies or success stories to see how AI is being applied in industries you care about.

AI doesn’t have to be intimidating. Start with the basics, build your knowledge step by step, and remember—it’s a tool to enhance what you do, not to replace you.

With this cheat sheet in hand, you’ll be better prepared to understand AI’s role and potential in our world.