From ChatGPT to AI Agents: The 3 Levels of AI, Simply Explained
Cutting Through the AI Noise
If you spend any time online, you’ve probably been hit by a wave of new AI terms. Phrases like "AI agents" and "agentic workflows" are everywhere, but most explanations are either so technical they require a computer science degree or so basic they don't tell you anything useful. It can feel intimidating and confusing, leaving you wondering what any of it actually means.
Let's start with a relatable premise: you probably use AI tools like ChatGPT or Claude regularly. You're comfortable with them, but you want to understand what's coming next without getting bogged down in jargon. You want to know how this technology is evolving and how it might affect you in the real world.
This article is designed to do just that.
We're going to distill the four most important, counter-intuitive, and impactful ideas about AI agents into a simple, scannable list. We’ll break down intimidating terms and explain what’s really happening when an AI goes from a simple chatbot to a true "agent."
The One Simple Trait That Separates an AI Agent from a Basic AI Workflow
Before we can understand an AI agent, we have to know what it isn't. Most of what people call "AI automation" today is actually a simple AI workflow. In a workflow, a human sets a predefined path for an AI to follow. In technical terms, this fixed path is sometimes called the "control logic"—it’s just the set of rules the human creates.
For example, you could create a workflow that tells an AI:
- Go to a specific Google Sheet and compile news links.
- Send those links to Perplexity to be summarized.
- Use Claude to draft a social media post based on the summaries.
In this scenario, the human is the decision-maker. You set the rules, write the prompts, and if the final LinkedIn post isn't funny enough, you have to go back and manually tweak the prompt for Claude. The AI is just following a fixed set of instructions.
The shift from a workflow to an agent hinges on one critical change.
The one massive change that has to happen in order for this AI workflow to become an AI agent is for me the human decision maker to be replaced by an LLM.
This is the most important distinction to grasp. It's the moment the AI stops being a tool that simply follows your instructions and becomes a decision-maker that actively pursues a goal you've given it.
That Scary Acronym 'RAG' is Just a Fancy Term for a Simple Workflow
One of the key building blocks for a more advanced AI is giving it access to outside information. This is where you might see the intimidating term "RAG" or "Retrieval Augmented Generation." It sounds incredibly complex, but it solves a very simple problem.
The problem is that a standard LLM’s knowledge is limited to its training data. It’s passive. For instance, a standard LLM can't tell you when your next coffee chat is because it can't access your calendar.
This is where RAG comes in. In simple terms, RAG is a process that helps AI models look things up before they answer. That’s it. RAG is the mechanism that gives an LLM a way to fetch external information, whether that’s accessing your Google Calendar to find an appointment or connecting to a weather service for a forecast.
Crucially, RAG is just a specific type of AI workflow. It gives an AI the ability to retrieve information, but it's still operating on a path set by a human. It's not some entirely different category of AI; it's just a technique to help an LLM overcome its limitation of having a fixed set of knowledge.
How Every AI Agent Thinks: The 'ReAct' Framework
But for an LLM to replace a human decision-maker, it needs more than just data—it needs a framework for thinking. This is where the "ReAct" framework comes in. It’s the mental model that allows an AI to operate autonomously. As the name suggests, it breaks down into two core components: Reason and Act.
- Reason: This is the "thinking" part. The AI analyzes the goal it has been given and determines the best approach. For instance, if its goal is to compile news articles, it might reason that compiling links in a Google Sheet is far more efficient than copying and pasting entire articles into a Word document.
- Act: This is the "doing" part. After reasoning out a plan, the AI takes action by using tools to execute it. Following its reasoning, it might choose to use Google Sheets as a tool because it knows the user's Google account is already connected, making it the most practical option.
This "Reason + Act" combination is the fundamental mechanic that allows an AI agent to function. It’s a simple but powerful loop that enables the agent to plan its own steps instead of just following a predefined script written by a human.
The Game-Changer is Autonomous Iteration
Remember our earlier workflow example, where the human had to manually rewrite a prompt to make a LinkedIn post funnier? This highlights a key limitation of workflows: any improvement requires manual trial and error.
This is where an AI agent makes its biggest leap. Instead of relying on a human for trial and error, it improves its own work through autonomous iteration.
Instead of waiting for human feedback, an agent can improve its own work. For example, after drafting the first version of the LinkedIn post, the agent can autonomously add another step to its process: it can call on a second LLM to act as a critic. This critic can evaluate the draft against a set of criteria, like "LinkedIn best practices," and provide feedback. The agent can then take this feedback, revise the post, and repeat this cycle of creation and critique until the output is satisfactory.
This is all done without any human intervention in the loop. This ability to self-correct is a massive leap forward. It moves the AI from a tool that needs constant human guidance to a system that can independently refine its work to achieve a high-quality outcome.
From Taking Orders to Taking Initiative
The journey from the AI we use today to true AI agents can be seen in three simple levels. We started with Level 1, passive LLMs that respond to our inputs. We then moved to Level 2, where human-directed AI workflows follow predefined paths to complete tasks.
Now, we are entering Level 3. An AI agent receives a goal, performs reasoning to determine how to best achieve it, takes action using tools, observes the result, and decides whether iteration is needed to produce a final output.
This marks a fundamental shift from AI that takes orders to AI that takes initiative.
As these autonomous agents become more capable and widespread, what is the one task you would trust an AI to handle for you completely from start to finish?


