How Vertical AI Agents Work

Now that we’ve talked about what Vertical AI Agents are, let’s take a look at how they actually work. These AI agents don’t start out intelligent. They have to be trained, just like people learn skills over time. But instead of sources like teachers and YouTube videos, they learn from data — often a massive amount of data. This training makes them really good at one job, whether it’s spotting fraud, assisting doctors, or even recommending new songs.

Just a quick note — I’m writing these articles as if the reader may not be familiar with several of these terms, or if they aren’t in the software field. Even if you have this experience, you may pick up something new.

Feeding the AI – Where Data Comes From

So before a vertical AI can do its job, it needs information. Imagine trying to play a new video game without ever looking at the rules. You may make some educated guesses based on general knowledge you’ve gained playing games over the years. But you’d really have no idea exactly what to do. AI is the same way; it needs examples to learn from.

Where Does the Data Come From?

• Healthcare AI: Medical images, patient records, doctor’s notes
• Finance AI: Transaction logs, fraud reports, stock market trends
• Retail AI: Purchase history, customer behavior, inventory levels

Retrieval-Augmented Generation (RAG) is a method that helps AI find the best and most useful information from huge amounts of data, improving what it learns. We’ll dig into this a bit more in the next article.

Cleaning the Data: Getting Rid of the Mess

AI can’t learn properly if the data is a mess. Garbage in leads to garbage out. Imagine trying to read a book full of spelling mistakes and missing pages. It wouldn’t make sense. That’s why data has to be cleaned before AI can use it. Cleaning means:

• Removing duplicate or useless data
• Filling in missing information
• Making sure all data follows the same format

Training the AI – Learning from Examples

Once the data is ready, it’s time to teach the AI. There are different ways AI can learn, just like us.

Three Ways AI Learns:

• Supervised Learning: The AI is given “labeled data,” meaning it’s told what’s right and wrong. Think of a teacher grading homework and showing students their mistakes.
• Unsupervised Learning: The AI is given data but not told what’s right or wrong. Instead, it finds patterns by itself, like a kid sorting Legos into colors without being told how.
• Reinforcement Learning: AI learns by trial and error, like playing a video game and figuring out what works based on scores and rewards.

AI developers often use pre-trained AI models (like using a pre-made cake mix instead of baking from scratch). APIs (Application Programming Interface) allow AI to access these models to learn even faster. We’ll talk more about APIs in a future article. They have multiple uses.

Fine-Tuning – Polishing AI’s Knowledge

Training gives AI a good starting point, but it’s not perfect. It needs fine-tuning to do its job well. This step is like practicing for a test — learning from mistakes and improving over time.

How AI Gets Fine-Tuned:

• Adjusting settings to improve accuracy (we’ll talk about what these settings are in a future article)
• Testing on new, unseen data
• Removing biases that could cause unfair results Many AI systems keep learning even after they’re deployed. With workflow automation, AI models can keep updating themselves without needing to be re-trained from scratch every time new data appears.

Putting AI to Work – Deployment

Once AI is ready, it’s time to put it to use. There are different ways to use an AI system:

• Inside apps or software (for example, an AI that detects fraud in banking apps)
• As an API (used by a chatbot that helps customer support teams)
• Standalone programs (like a medical AI that scans X-rays for doctors)
• Inside existing tools we use daily (like Slack, WhatsApp, etc.)

Continuous Learning – Keeping AI Smart Over Time

Just like we need to keep learning to stay sharp and relevant in our field, AI needs updates too. If an AI is trained on old data, it might make bad or outdated decisions. To remain useful, it must keep learning from new data.

How AI Stays Up To Date:

• New training data helps it stay accurate
• Feedback from users helps it adjust and improve
• Error checking helps fix mistakes and biases As with initial training, AI systems can use Retrieval-Augmented Generation (RAG) to pull in the latest information whenever they make decisions. This helps them avoid outdated answers and stay fresh.

What is Inference?

Once AI is trained, it needs to use what it learned to make decisions. This is called inference. It’s when AI looks at new input and predicts an answer based on what it was taught.

• Example: A fraud detection AI is trained on thousands of real fraud cases. When it sees a new transaction, it infers whether it looks like fraud or not.
• Example: A medical AI learns from millions of X-ray images. When it sees a new X-ray, it infers if there’s a problem. ## Wrapping Up Vertical AI Agents don’t start smart. They learn from data, get trained, and keep improving over time. But learning isn’t enough. AI needs tools to help it stay useful. From Retrieval-Augmented Generation (RAG) to APIs and workflow automation, these technologies help AI work more efficient, stay current, and improve over time. Improving enough to think for itself? Well, that’s a debate for another time.

Next time, we’ll dive deeper into how these tools work and how they help AI stay accurate, relevant, and powerful.