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AI Agent Glossary

Context engineering

Designing what information enters an agent's context window at each step.

Context engineering covers system prompts, tool descriptions, retrieved documents, history compaction and memory — everything the model sees. The goal is to find the smallest set of high-signal tokens that maximises the probability of the desired next action. It matters more for agents than for chat because agents accumulate context over many steps.

Source: Effective context engineering for AI agents — Anthropic

See the numbers behind this term: AI Agent Statistics 2026.