The Ultimate Guide to AI Concepts for Building LLM Apps and Agents (with Open Source Examples)

by | Apr 13, 2025 | Tech Playbook

In the fast-moving world of AI development, understanding the landscape of concepts and tools is essential. Whether you’re building a chatbot, an AI agent, or a knowledge assistant, these foundational concepts form the building blocks of a powerful LLM application.

Below is a categorized, concept-driven guide to help you build AI-native apps with clarity.


1. LLM (Large Language Models)

What it is: The core engine that generates, understands, and transforms language.
Purpose: Power conversation, summarization, code generation, reasoning, etc.
Top Open Source Example:

  • LLama 3 / 4 (by Meta)
  • Mistral

2. Prompt Engineering

What it is: Designing inputs to get optimal outputs from an LLM.
Includes: Few-shot, zero-shot, chain-of-thought, system prompts.
Open Source Tools:


3. RAG (Retrieval-Augmented Generation)

What it is: Combines LLMs with external data (like documents or databases) for up-to-date, grounded responses.
Includes: Chunking, embedding, retrieval, context injection.
Top Open Source Examples:

  • LlamaIndex
  • LangChain RAG pipeline
  • Haystack
  • RAGStack by Hugging Face

4. Embeddings

What it is: Numeric representations of text used for semantic similarity and search.
Use Cases: Similarity search, retrieval, memory.
Popular Open Source Models:

  • BGE by BAAI
  • E5 by MTEB
  • Instructor
  • GTE (Google)

5. Vector Database

What it is: Stores and retrieves embeddings for fast similarity search.
Use Cases: Powering RAG, recommendations, memory for agents.
Top Open Source Examples:

  • Qdrant
  • Weaviate
  • Milvus
  • FAISS (local, in-memory)

6. Agents

What it is: Autonomous AI entities that decide what tools to use, when to reason, and how to act.
Includes: Planning, reasoning, tool use, memory.
Top Open Source Frameworks:

  • LangGraph
  • AutoGen (Microsoft)
  • CrewAI
  • MetaGPT

7. State Management / Memory

What it is: Persistence of context, past interactions, and state across agent steps.
Types: Short-term (per session), long-term (persistent), episodic.
Open Source Patterns:

  • LangGraph state object
  • Redis memory stores
  • LlamaIndex context memory

8. Tool Use / Function Calling

What it is: Agents call APIs or tools (weather, search, DB) to gather info or act.
Types: Function Calling, JSON-based tools, plugins.
Examples:

  • LangChain tools
  • AutoGen tool wrappers
  • ReAct agent pattern

9. Orchestration Framework

What it is: Manages flows between LLMs, tools, memory, users.
Purpose: Build complex LLM apps with modular logic.
Top Open Source Examples:

  • LangChain
  • LangGraph
  • Semantic Kernel
  • Haystack

10. Tool Integration / Plugins

What it is: External utilities agents can use (e.g., code interpreter, SQL, browser).
Popular Plugins:

  • Python REPL
  • SQL Database tools
  • Web search tools

11. Chunking & Text Splitting

What it is: Breaking documents into digestible pieces for embedding and context injection.
Tools:

  • RecursiveTextSplitter (LangChain)
  • SentenceSplitters in LlamaIndex

12. Guardrails & Validation

What it is: Ensure outputs are safe, correct, and within bounds.
Includes: JSON schema validation, regex, classification, moderation.
Top Tools:

  • Guardrails.ai
  • Rebuff
  • Flowise validators
  • LMQL (LLM query language with constraints)

13. Observability & Tracing

What it is: Track what LLMs do, debug reasoning paths, and improve performance.
Tools:

  • LangSmith
  • Traceloop
  • Helicone

14. Agent Memory Graphs / Cognitive Architectures

What it is: Structure agents with working memory, long-term memory, task queues.
Open Source Ideas:

  • LangGraph state trees
  • MemGPT
  • CAMEL agents
  • DSPy (Stanford)

15. Deployment & Serving LLMs

What it is: Host models or agents locally or via APIs.
Open Source Options:

  • llama.cpp
  • Ollama

16. Multi-Agent Systems

What it is: Multiple agents collaborating or debating to solve a problem.
Patterns:

  • Planner → Tool Selector → Executor
  • Debate → Finalizer

Frameworks:

  • AutoGen
  • CrewAI
  • LangGraph
  • MetaGPT

17. Frontend for LLM Apps

What it is: Chat interfaces, dashboards, inputs for end-users.
Popular Open Source UIs:

  • LangFlow (visual LangChain builder)
  • Flowise

18. Multi-modal & Vision Models

What it is: LLMs that understand both text and images (or more).
Top Models:

  • MiniGPT-4
  • Mistral multimodal

19. Agents-as-APIs (AgentOps)

What it is: Serve agents as RESTful APIs, SaaS logic, or functions.
Use Cases: CRM bots, assistants, devtools.
Tools:

  • FastAPI + LangChain
  • CrewAI + Flask

20. Data for LLM Apps

What it is: Source material for RAG, fine-tuning, evals.
Includes: PDFs, Notion, Confluence, SQL, CSVs
Tools:

  • LlamaIndex connectors
  • LangChain loaders
  • Unstructured.io

Final Thoughts

Building AI agents is no longer just about using a language model — it’s about orchestrating tools, data, memory, and workflows into reliable, explainable, and user-friendly systems.

This guide covered the foundational concepts and the best open-source options for each one. Whether you’re building a real estate assistant, internal agent platform, or dev AI co-pilot — these are the blocks you’ll work with.

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