Definition
An LLM that can take actions in the world by invoking tools, not just produce text.
In practice
In practice, an agent is a loop: read input → decide what to do → call a tool (or respond) → observe the result → decide again. The same model becomes 'an agent' the moment you give it the ability to call functions like 'book_appointment' or 'query_crm'. SMB-relevant agents almost always have a narrow scope and a small toolbox — open-ended 'do anything' agents fail in production.