Custom AI vs. SaaS AI
Custom AI and SaaS AI represent two ends of a build-versus-buy spectrum. SaaS AI is a vendor's model behind a vendor's interface—ChatGPT Enterprise, Jasper, Writer—where you get speed to deployment but inherit someone else's architecture, limitations, and roadmap. Custom AI is a system built for your specific data, workflows, and success criteria, typically combining foundation models with proprietary retrieval layers, custom evaluation pipelines, and interfaces designed for your users. The tradeoff is real: SaaS AI ships in days, custom AI ships in weeks or months. But SaaS AI gives every competitor the same capability, while custom AI can become a durable advantage. The right answer depends on whether the AI capability you need is a commodity or a differentiator. Email summarization is a commodity—buy it. A system that underwrites insurance risk using your proprietary claims data is a differentiator—build it.
Related terms:
AI Agent
An AI agent is a system that autonomously breaks a goal into steps—calling tools, reading results, and adjusting course—without waiting for a human prompt. While powerful for tasks with clear success criteria, agents can be dangerous when goals are vague or environments unfamiliar and typically need tight guardrails in production.
Agentic AI
Agentic AI refers to systems that autonomously pursue goals—planning actions, employing tools, and adapting based on feedback—without waiting for human instructions at every step. Unlike passive AI that only responds when prompted, agentic AI can monitor systems, diagnose issues, and propose fixes on its own.
System Prompt
A system prompt is an invisible set of instructions given to a language model—defining its persona, constraints, output format, and behavioral rules—and occupies the “system” role in APIs like OpenAI and Anthropic. It shapes every response by encoding business logic and is the most efficient way to control model behavior.