What is Agentic AI and How Does it Work?

What is Agentic AI and How Does it Work?

Agentic AI refers to an advanced category of artificial intelligence that can independently perform tasks and make decisions to achieve a set goal. Unlike simpler AI systems that are reactive, Agentic AI can engage in multi-step reasoning and planning. It doesn't just respond to queries but works autonomously to fulfill complex objectives by utilizing external tools and systems.

For example, imagine an AI system managing an employee's HR tasks. Instead of simply answering questions like, "How many vacation days do I have?", Agentic AI would manage the entire process of checking leave balances, sending calendar invites, and even applying for leave, all without human input.

The Key Features of Agentic AI

1. Goal-Oriented Planning

One of the hallmark features of Agentic AI is its ability to plan and execute actions autonomously. Unlike basic AI systems that follow pre-defined instructions, agentic AI sets its own course of action to meet specific goals. This requires analyzing the situation, formulating a strategy, and carrying out the necessary tasks.

2. Multi-Step Reasoning

Agentic AI can process complex, multi-step problems. It doesn't just perform individual tasks but reasons through them, making decisions at each step. For example, to organize a welcome meeting for a new employee, the system would autonomously create a meeting agenda, send invitations, and integrate with calendar systems—all without further direction.

3. Tool and Knowledge Access

Agentic AI systems integrate with various tools like databases, APIs, and external platforms (e.g., HR management systems, calendar tools) to accomplish tasks. These integrations allow the AI to access relevant data and make informed decisions based on real-time information.

4. Memory and Learning

Some advanced Agentic AI systems have memory. They can recall past interactions and use this information to make more informed decisions. For example, an HR assistant powered by agentic AI may remember an employee's past leave requests and preferences, personalizing its responses.

5. Autonomous Action

Perhaps the most defining characteristic of Agentic AI is its autonomy. The system doesn't require human input at every step; once a goal is set, the AI independently performs the necessary actions. Whether it’s generating a report, processing a transaction, or managing a calendar, Agentic AI can handle tasks from start to finish.

How Does Agentic AI Work?

To understand Agentic AI better, let’s break down its workflow into four steps:

1. Perceive: The AI gathers data from various sources (sensors, databases, external APIs) and processes it to understand the environment.
   
   

2. Reason: An AI model like a large language model (LLM) orchestrates the reasoning process, analyzing the data and developing potential solutions.
   
   

3. Act: Using integrations with external tools and APIs, Agentic AI takes the necessary actions based on the plans it has developed. This could be anything from generating emails to creating new user profiles in a database.
   
   

4. Learn: Agentic AI improves over time, utilizing a feedback loop. Data generated through interactions feeds back into the system, refining its models and increasing efficiency.

Watch this short explainer video on Agentic AI to see it in action:

The Key Difference: Agentic AI vs. Simpler AI Systems

The key difference between RAG Chatbot, Tool-Augmented Chatbot, and Agentic AI lies in their capabilities. Here's a comparison chart that illustrates the distinct features of each system:

RAG Chatbot: Primarily reactive, it answers questions by retrieving data from pre-defined sources. It does not reason, plan, or make independent decisions.

Tool-Augmented Chatbot: Reactive and uses tools to perform actions like retrieving data, but still lacks reasoning, planning, and proactivity. It is more advanced than a RAG chatbot but not as autonomous as Agentic AI.

Agentic AI: The most advanced, Agentic AI is reactive, utilizes tools, performs reasoning, plans, and is proactive. It autonomously takes action, reasons through problems, and executes tasks toward complex goals.

Real-World Applications of Agentic AI

Agentic AI is already making an impact in various industries. Here are a few ways it’s being used:

Customer Service

AI agents in customer service have traditionally been reactive, responding to user queries. Agentic AI takes this further by autonomously handling tasks like processing claims, suggesting the best solutions, and even completing transactions based on user preferences.

Healthcare

In healthcare, Agentic AI can analyze large volumes of patient data and suggest optimal care plans. It can also manage administrative tasks like scheduling appointments, handling medical records, and offering 24/7 support to patients.

AI in HR

Imagine a system that not only answers HR-related questions but also processes employee leave requests, onboards new hires, and manages payroll tasks. This is where Agentic AI shines, creating significant efficiencies by automating complex HR workflows.

Software Development

AI-powered coding assistants like Replit and GitHub Copilot are examples of Agentic AI. These systems can write code, debug issues, and even suggest improvements—all based on the programmer’s goals and context.

Travel and Logistics

Agentic AI can plan a complex itinerary, such as booking flights, accommodations, and activities, while considering constraints like budget and weather. The system could autonomously execute every step, saving users time and effort.

Gen AI vs. Agentic AI

Generative AI (Gen AI) and Agentic AI often get confused, but they serve different purposes.

• Generative AI: Focuses on creating new content based on input data. For example, GPT models can generate text, articles, or even code based on prompts but lack the ability to plan or execute tasks autonomously.
  
  

• Agentic AI: Goes beyond generation and can make decisions and carry out multi-step tasks autonomously. Agentic AI is designed for complex goal achievement, integrating various tools, making decisions, and executing actions.
  
  

While Gen AI might help write a report, Agentic AI would be able to plan the entire process, from gathering data to generating the report and formatting it according to the user’s specifications.

AI Agent vs. Agentic AI

The terms AI agent and Agentic AI are related but distinct:

• AI Agent: Refers to any system that can autonomously complete tasks but often relies on external inputs at each step. It can perform functions like answering questions or processing requests based on predefined rules.
  
  

• Agentic AI: Not only performs tasks autonomously but also has the capability for multi-step reasoning and complex planning. Agentic AI can independently decide how to complete a task and even alter its course of action based on new information or goals.

The Future of Agentic AI

The future of Agentic AI is bright, and its potential to transform industries is vast. With continued advancements in machine learning, natural language processing, and automation, agentic AI will become more adept at handling increasingly complex tasks across various sectors.

As businesses embrace these intelligent systems, we can expect to see:

• Improved Efficiency: Agentic AI systems will automate not just basic tasks but also more complex workflows, freeing up human workers to focus on higher-value activities.
  
  

• Better Decision-Making: With the ability to analyze vast amounts of data and execute multi-step plans, agentic AI will enable more informed, data-driven decision-making across industries.
  
  

Scalable Solutions: As AI technology advances, agentic systems will be able to handle tasks at scale, transforming industries like customer service, finance, and healthcare.

Conclusion

Agentic AI is a game-changer in the AI space, offering a higher level of autonomy and intelligence than traditional systems. By combining reasoning, planning, action, and learning, Agentic AI can handle complex, multi-step tasks that were once the domain of humans. It’s already making waves in industries like healthcare, customer service, software development, and HR, and its potential is limitless.

Whether you're looking to understand how it can improve your business processes, help with personal productivity, or revolutionize customer service, Agentic AI is the future of AI systems. With its ability to adapt, reason, and act independently, Agentic AI is pushing the boundaries of what artificial intelligence can do.

FAQs

What is the concept of Agentic AI?

Agentic AI refers to advanced AI systems capable of autonomously reasoning, planning, and executing multi-step tasks to achieve specific goals without constant human input.

What is the difference between Gen AI and Agentic AI?

Generative AI (Gen AI) focuses on creating content, such as text or images, while Agentic AI goes further, performing complex tasks, making decisions, and interacting with tools autonomously to achieve goals.

Is ChatGPT an Agentic AI?

No, ChatGPT is a Generative AI that generates responses based on user inputs. It doesn't perform multi-step tasks or execute actions autonomously, which are key characteristics of Agentic AI.

Can Agentic AI replace human decision-making in businesses?

Agentic AI can automate decision-making for routine tasks but still requires human oversight for complex, strategic, and ethical decisions

What is Codebasics' role in teaching Agentic AI?

At Codebasics, we provide comprehensive tutorials and resources to help you understand and implement Agentic AI, guiding you through its concepts, applications, and practical usage in real-world scenarios