API (Application Programming Interface)
Also called: Application Programming Interface
An API, or application programming interface, is a defined interface that allows software systems to exchange information. It is the foundational plumbing of modern software: when your platform surfaces a suggested response or summarises a document on upload, there is almost certainly an API call behind it. The Model Context Protocol builds on this principle but establishes a universal convention, so any AI agent can connect to any compatible tool without a custom integration for each pair.
In practice
Most enterprise AI is bought as an API call rather than a licence, which turns it into a metered cost that rises with usage instead of headcount. That changes the diligence question from what the software cost to what it costs per unit of use, and who inside the business can turn the tap up.