Technical Guide10 min read

How Do AI Agents Work? Technical Guide

Understand the technical architecture behind AI agents: from perception and reasoning to planning, action execution, and continuous learning.

Updated Feb 16, 2026
Intermediate Level

The AI Agent Architecture

AI agents follow a continuous cycle of perception, reasoning, action, and learning. This architecture, often called the "sense-think-act" loop, enables agents to operate autonomously in complex environments.

The Core Agent Loop

1

Perceive

Receive input from environment (messages, data, events)

2

Think

Analyze context, reason about options, plan next steps

3

Act

Execute actions using tools and APIs

4

Learn

Store feedback and improve future performance

This cycle repeats continuously, allowing the agent to adapt to changing conditions and improve over time. Modern AI agents are built on top of Large Language Models (LLMs) like GPT-4, Claude, or Gemini, which provide the reasoning engine at the core.

Perception & Input Processing

Perception is how an AI agent understands its environment. Unlike humans who perceive through senses, AI agents process structured and unstructured data from various sources.

Natural Language Input

Agents process text from emails, chat messages, support tickets, or voice transcriptions. They extract intent, entities, and context using natural language understanding (NLU).

Structured Data

Agents can query databases, read spreadsheets, parse JSON/XML, and integrate with business systems to gather relevant information.

Event Triggers

Agents listen for events like new customer signups, order completions, or threshold alerts, then react accordingly.

Modern agents use embedding models to convert text into numerical vectors, enabling semantic search and similarity matching. This allows them to understand meaning, not just keywords.

Reasoning & Planning

The reasoning layer is where the agent's "intelligence" resides. This is typically powered by a Large Language Model that can understand context, generate responses, and make decisions.

Key Reasoning Techniques

Chain-of-Thought (CoT)

The agent breaks down complex problems into step-by-step reasoning, showing its work like a human would. Example: "First, I need to check inventory. Then, calculate shipping cost. Finally, provide a quote."

ReAct (Reasoning + Acting)

The agent alternates between reasoning about the problem and taking actions to gather more information. It can plan, execute, observe results, and re-plan dynamically.

Few-Shot Learning

Agents learn from examples provided in their prompt. By showing 2-3 examples of desired behavior, the agent can generalize to new situations.

Retrieval-Augmented Generation (RAG)

The agent retrieves relevant information from a knowledge base or vector database before generating a response, ensuring accuracy and up-to-date information.

Planning involves breaking down goals into actionable subtasks. An agent might create a multi-step plan like: "1) Query CRM for customer data, 2) Check product availability, 3) Generate personalized recommendation, 4) Send email."

Action & Execution

Actions are what make AI agents truly useful—they don't just talk, they do. Agents execute actions through "tools" or "function calling," which are integrations with external systems.

Tool/Function Calling

Modern LLMs support function calling, where the agent can invoke predefined functions to interact with external systems. Example tools:

  • send_email(to, subject, body)
  • query_database(sql)
  • create_calendar_event(date, title)
  • update_crm_record(id, fields)

API Integrations

Agents connect to third-party services via REST APIs, webhooks, or SDKs. Common integrations include Slack, Gmail, Salesforce, Stripe, Zendesk, and thousands of other tools via platforms like Zapier or Make.

Code Execution

Advanced agents can write and execute code in sandboxed environments to perform complex calculations, data transformations, or custom logic that goes beyond pre-built tools.

Safety mechanisms are critical during action execution. Agents typically require human approval for high-risk actions (like financial transactions or data deletion) and have rate limits to prevent runaway behavior.

Learning & Memory

AI agents improve over time through various forms of memory and learning mechanisms.

Short-Term Memory (Context Window)

The agent remembers the current conversation or task context. Modern LLMs have context windows ranging from 8K to 200K+ tokens, allowing them to track long conversations or analyze large documents.

Long-Term Memory (Vector Databases)

Past interactions, customer preferences, and learned knowledge are stored in vector databases (like Pinecone, Weaviate, or Chroma). The agent can recall relevant information from thousands of past interactions instantly.

Episodic Memory

The agent stores specific interaction histories (e.g., "Last time this customer called, they complained about shipping delays"). This enables personalized, context-aware interactions.

Reinforcement Learning from Human Feedback (RLHF)

Agents can be fine-tuned based on human ratings of their performance. When users mark responses as "helpful" or "unhelpful," the agent learns to optimize for better outcomes.

Multi-Agent Systems

Complex problems often require multiple specialized agents working together, each with specific expertise and responsibilities.

Example: Customer Service Multi-Agent System

Router Agent

Classifies incoming requests and routes to appropriate specialist agent

Technical Support Agent

Handles product troubleshooting and technical questions

Billing Agent

Manages subscription changes, refunds, and payment issues

Escalation Agent

Determines when to hand off to human support and summarizes context

Multi-agent systems can collaborate, delegate tasks, and even negotiate with each other to achieve complex goals that would be difficult for a single agent to handle.

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