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THE REFERENCE DESK / GLOSSARY

Clearer words.
Better questions.

Twenty-four working definitions for the AI economy. Each ends with a question that puts the term to use.

24 terms

Accelerator

Specialized hardware used to speed up selected computing workloads, including AI operations.

Ask: Does this hardware fit the actual workload?

Explore infrastructure ↗
API

An interface through which one software system requests a service from another.

Ask: What permissions, limits and costs apply to each request?

Explore practical ai ↗
Billable utilization

The share of a defined capacity unit that produces billable delivery under a stated contract.

Ask: What exactly counts as billable?

Explore economics ↗
CAPEX

Capital expenditure: spending on assets expected to support operations over time.

Ask: What must be paid before the service can generate cash?

Explore economics ↗
Cloud compute

Access to computing resources supplied as a service.

Ask: Which resources are available under which commitments?

Explore infrastructure ↗
Colocation

A service providing space and supporting facility infrastructure for customer IT equipment.

Ask: Which power, cooling and connectivity services are included?

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Connection capacity

Electrical capacity at a specified grid or supply connection boundary.

Ask: Is it proposed, contracted or available now?

Explore energy ↗
Contribution

Revenue less a specified set of delivery costs. Its meaning depends on the stated cost boundary.

Ask: Which costs remain outside this measure?

Explore economics ↗
Data center

A facility that houses computing equipment and the systems needed to support its operation.

Ask: What workload can this particular facility support?

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Electrical load factor

Average power draw divided by a specified capacity over a stated period.

Ask: What capacity and time period form the denominator?

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Evaluation set

A collection of tasks used to assess a system against defined criteria.

Ask: Does it represent the cases that matter in operation?

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GPU

Graphics processing unit: a processor used for parallel computation, including many AI workloads.

Ask: Which model, memory and system configuration are required?

Explore infrastructure ↗
Inference

Running a trained model to generate an output from an input.

Ask: What quality, response time and cost does this task require?

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IT capacity

A stated electrical capacity allocation or design boundary for IT equipment.

Ask: Is the figure an installed, available or proposed capacity?

Explore energy ↗
kW and kWh

A kilowatt measures power; a kilowatt-hour measures energy. One kW used for one hour is one kWh.

Ask: Are we discussing instantaneous demand or consumption over time?

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Latency

The time between a request and the relevant response, measured at a specified boundary.

Ask: Which part of the user experience is included?

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MW

A megawatt equals 1,000 kilowatts. It is a unit of power.

Ask: Does this mean grid supply, facility demand or IT capacity?

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OPEX

Operating expenditure: costs associated with running a business or service.

Ask: Which costs vary with use and which remain committed?

Explore economics ↗
PUE

Power Usage Effectiveness: total data-center energy divided by IT equipment energy.

Ask: What boundary, period and operating conditions were used?

Explore energy ↗
RAG

Retrieval-augmented generation: a workflow that retrieves information to provide context for model generation.

Ask: Does the system retrieve the right material and use it faithfully?

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Sovereignty

A context-dependent objective concerning control, access or autonomy across parts of an AI system.

Ask: Which layer and which kind of control are meant?

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Token

A unit into which a model system divides text or other input or output representations.

Ask: How does token usage translate into accepted-task cost?

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Training

The process of adjusting model parameters using data and an optimization procedure.

Ask: Which capability is needed, and is new training necessary?

Explore infrastructure ↗
Unit economics

Revenue and relevant costs expressed per defined commercial unit.

Ask: Is the unit a useful, accepted and paid-for outcome?

Explore economics ↗

Working editorial definitions, rather than a technical standard or a legal glossary. For the PUE source, see The Green Grid.