Function Calling or Tool Calling allows AI models to invoke external functions or services dynamically during a conversation. Instead of just generating text, the AI can trigger specific tools or APIs to perform tasks, retrieve data, or execute commands.
When the AI recognizes a request that requires an external action, it formats a structured call to a predefined function or tool. This call is then executed outside the model, and the result is fed back into the conversation to generate relevant responses or next steps.
For AI product managers, function calling improves user experience by delivering accurate, real-time actions. It reduces implementation complexity, lowers latency, and optimizes costs by offloading tasks. This approach enhances scalability and enables richer, more interactive AI products with clear business value.