A Short Guide to AI Agents: What They Are and How They Work

By Anja Prosch

Anja Prosch

4 Min

July 23, 2025

AI agent has become a new buzzword. Everywhere we hear about how to build an AI agent, why everyone needs one, and how it can even help save money for you or your business.

If you feel like you’re missing out, this article breaks down what an AI agent is, how it works, and what its strengths and weaknesses AI agents have.

What is an AI Agent?

An AI agent is like a smart assistant that can think, learn, and act to complete tasks on its own.

Imagine you tell your AI assistant: “Book me a flight, hotel, and taxi for my trip.” A regular app might need you to do everything yourself, step by step. But an AI agent can understand the task, search, compare prices, make a booking, and even adjust if plans change.

Intelligent analysis + action – that’s what sets AI agents apart from AI chatbots. Unlike chatbots that only respond to prompts, AI agents don’t just help you; they take active steps and operate with autonomy.

How do AI agents work?

AI agents work by understanding your goal, planning how to reach it, and then taking actions.

For example, you ask an AI agent to prepare a business report.

First, the agent interprets your request using natural language processing, just like a regular chatbot. Then, it will gather data from multiple sources like your CRM, analytics tools, and spreadsheets. After that, it will analyze performance trends, generate charts, and draft a slide deck with key insights. It may even schedule the presentation meeting and share the materials with your team.

Some AI agents can also learn from past tasks, for instance, which format you prefer or which tools you like. This is still limited, but improving fast.

What if they do something I didn’t expect or something I don’t like?

Autonomy is one of the most defining and powerful features of AI agents. Unlike traditional software that follows fixed commands, an autonomous AI agent can understand a goal, plan how to achieve it, choose the right tools or actions – all on its own.

However, autonomy is also one of the biggest challenges of AI agents. Giving AI the power to act independently means developers need to carefully control what it can do, how it does it, and when it should ask for permission.

So what’s the solution? Do we just wait for the future to make AI smarter, or do we stay in control forever?

In reality, it’s about balance. Full autonomy sounds exciting, but in practice, most AI agents today are designed with “human-in-the-loop” systems. That means they act independently only up to a point, and then ask for your approval before doing anything sensitive, for example, sending emails, making purchases, or accessing personal data. This keeps users in charge while still benefiting from automation.

Over time, as trust and technology improve, you can adjust how much freedom you give it.

The future of AI agents

The appearance of AI agents highlights the transition between AI thinks to AI acts. As the technology behind them improves, we can expect AI agents to become more autonomous, reliable, and personalized.

In professional settings, AI agents have the potential to revolutionize how people work. Teams might rely on agents to coordinate projects, manage workflows, or even write code.

However, with this progress also comes important questions about trust, control, and ethical use.