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Practical AI Track 1 · AI Essentials
0/75 lessons read
AI ESSENTIALS · LESSON 14

Cheat sheet & pop quiz

You finished the track. Here it is on one page, plus 5 quick questions. Your goal: answer each one before you reveal it.

If you remember nothing else

LessonThe idea to keep
What an AI model isA model is a next-token guesser. Training sets its weights, and then they are only read. It does not learn from your chats. It knows nothing after its knowledge cutoff.
Tokens and context windowsEverything is counted in tokens. Input and output share one context window. Output costs more. Details buried in a long text are easy to miss.
Inside one answerReading the prompt is one pass. Writing is one pass per token, so output is the slow part. Saved notes (the KV cache) make prompt caching work. A mixture of experts is big in memory but does little math per token.
Why answers change: temperatureTemperature sets how much answers vary. Use it low for facts and code, higher for new ideas. It changes variety, not truth.
When AI makes things upSounding sure is not being right. A citation is a claim to check. Give it sources. Ask neutral questions, so it does not just agree with you.
Prompts that workA prompt is a brief: goal, context, format and a few examples. Let it say "not sure". The system prompt is not a security wall.
Choosing a modelMatch the model to the job: size, effort, speed and cost. Send easy work to small models.
Models that pick from a listA decision model picks from a fixed list in one fast step. It can only pick options you gave it. Add "other", and let a person decide when its confidence is low.
Open and closed modelsOpen weights are not open source. Read the license, not the label. A smaller, quantized model can run on your own computer.
Search by meaning: embeddings and RAGEmbeddings turn text into arrows. Arrows that point the same way have a similar meaning. RAG finds the right pages and adds them to the prompt.
Prompt, RAG or fine-tune?Cheapest fix first: prompt, then RAG for facts that change, then fine-tuning for habits. Never fine-tune for facts. Exact jobs are for plain code.
Evals: does your AI work?Evals, not vibes. Use a fixed set of real cases and a way to score them. Check case by case after every change.

Pop quiz: 5 questions

Q1 · Priya asks the company assistant for this year's new expense limit. It answers with confidence, but gives last year's number. Nobody changed the model. What happened? What is the fix?

Q2 · A help bot sends a 40-page manual and the whole chat with every message. It is slow and costly. It also keeps missing a rule on page 22. What is going on? What would you change?

Q3 · The same support ticket gets a different label each time. Meanwhile, the marketing team wants "more creative" product names from the same model. What do you change for each? What will it not fix?

Q4 · The legal team wants AI help with contracts. The contracts must not leave the building. Someone says, "Let's fine-tune a model on all our contracts, so it knows them." What would you do instead?

Q5 · Priya changes a prompt. She tries 3 questions and loves the answers. On her 20-case test set, the pass rate goes up from 80% to 85%. But 2 "not in the sources" cases that passed before now fail. Should she ship it?

Go deeper: a checklist before you rely on AI
  • Could the fact be newer than the model, or private? Then it must come with the question. See Search by meaning.
  • Did it cite a source? Did I open it? See When AI makes things up.
  • Did my question show the answer I hoped for? Then ask again, neutrally.
  • Is my brief complete: goal, readers, format, examples and "say if you are not sure"? See Prompts that work.
  • Is this the right size, effort and speed? Is it the right place for this data? See Choosing a model.
  • Is this really a choice from a list? See Models that pick from a list.
  • Is the problem missing knowledge, a wrong habit, or not an AI problem at all? See Prompt, RAG or fine-tune?
  • Did I run the eval again after the change? See Evals.
Track complete 🎉

That's AI essentials. You can explain what a model, a token and a context window are. You can tell when an assistant may be wrong, or may just agree with you. You can write a good brief and pick a model. You can choose the right fix, and prove that a change helped. Next up — Working with AI: APIs, tools, agents and automation. Start at the Working with AI start page.

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Pick one task you do every week. Write a good brief for it. Test it on 5 real examples with any AI assistant before you trust it.

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