What is Tool Calling?
When a model invokes an external function or API instead of only producing text.
Formal Definition
Tool calling lets a model request a defined external function, such as a data lookup or a calculation, and use the result in its response, extending it beyond text generation. Providers expose it through function or tool schemas. The same mechanism that enforces structured output can also let a model fetch data or take actions in a controlled, checkable way.
In Simple Terms
It is giving an AI buttons it can press. Rather than just talking, the model can call a real tool, like fetching a stock price or running a calculation, and use what comes back.
Example
A trading model could call a price-lookup tool to confirm a quote before deciding, instead of relying on a number it half-remembers.