In the context of customer engagement, AI agents are automated systems that can understand natural and unstructured language, interpret intent, and then provide contextual and helpful responses, source information or take the desired actions. 

Another way to look at it is that AI agents are like highly advanced, next generation chatbots that go beyond mere scripted responses. They offer a smarter way to engage with customers, and unlike old-style chatbots, AI agents have certain features that make them better for performing tasks and conducting complex and varying conversations. 

Destinctive Features of AI Agents 

AI Agents can Function Autonomously and Make Decisions 

They are designed to operate independently, without constant human supervision, and can adapt their behaviour based on changing conditions. As such, these intelligent agents are often used to automate conversations with customers and field their queries since they can make informed choices and execute actions on behalf of human agents. 

AI Agents Built on Language Models and NLP Engage in Human-Like Interaction 

Language models (large or small) form the basis of the AI tech powering AI agents. The AI is also built on sophisticated algorithms, including natural language processing (NLP) and machine learning (ML), to interpret and respond to users or customers in a plausible, conversational way.  

AI Agents Extract Entities and Recognise Intents 

Entities in AI are specific pieces of information the AI agent recognises, like dates or amounts, while intents are the purposes behind a customer's message, such as requesting a payment plan. For example, the entity might be "£500" and the intent could be "discuss repayment options". 

AI Agents Work as Co-pilots or Intelligent Assistants 

Additionally, AI agents come in the form of co-pilots, a type of intelligent assistant that is integrated with the broader system, such as a company knowledge base. Co-pilots are designed to proactively offer suggestions, insights, and actions.

AI Agents can Interpret Rich Media 

Advanced AI agents can understand different communication modes other than text, such as images, videos and sound, and they can also respond using these formats.

The Difference Between AI Agents and Traditional Chatbots 

Unlike traditional chatbots, which offer limited interaction capabilities, AI agents can understand context and be adaptable.  

Older chatbots typically handle straightforward queries with a set of pre-programmed responses, often failing when faced with unexpected requests. In contrast, AI agents can understand nuanced language and user intent, allowing for more useful communication. 

Read here for a more detailed look at AI agents vs chatbots