AI glossary for businesses
API
In short
An API (application programming interface) is a defined way for one piece of software to request data or actions from another. Instead of a person clicking through screens, programs exchange structured messages. AI vendors such as OpenAI, Anthropic and Google offer APIs, so businesses can add AI models to their own systems and automations.
How an API works
Think of a waiter in a restaurant. You do not walk into the kitchen. You give your order to the waiter, who passes it on in a form the cooks understand and brings back your food. An API is that waiter between two software systems.
In practice, one system sends a request, for example "give me today's orders" or "summarise this text", and the other sends back a response, usually in a structured format such as JSON. Access is controlled with an API key, which works like a password for software and must be kept secret.
AI APIs work the same way. Your system sends a prompt and some data to a model from OpenAI, Anthropic, Google or another provider, and receives the answer. You usually pay per use, measured in tokens, rather than a flat monthly fee per user.
In practice for a small business
A small consulting firm records client calls and keeps its notes in HubSpot. Using the APIs of a transcription tool, an AI model and HubSpot, an automation can take each call transcript, draft a summary with next steps and add it to the right contact record for the consultant to review. No one copies and pastes between tabs. The use case on AI for meeting notes and CRM updates shows the flow.
You often do not need to write code to use APIs. Tools like Zapier and Make wrap them in visual building blocks. Custom code makes sense when volumes are high or the logic is complex.
Why it matters and what to watch out for
Protect your keys. A leaked API key can be misused and run up charges. Store keys securely and never paste them into shared documents.
Set spending limits. Pay-per-use costs grow with volume. Most AI providers let you set budgets or alerts.
Check data terms. API terms often differ from those of consumer apps, including on whether your data is used for training. Read them, sign a data processing agreement where needed, and check with your DPO when personal data is involved.
Plan for change. Providers update or retire models and API versions. Someone must own maintenance.