What is Vector Database?
A database that stores and searches embeddings to find items by meaning.
Formal Definition
A vector database stores, indexes, and queries embedding vectors, including text, image, and audio representations, returning the nearest matches to a query vector. It is the storage layer behind semantic search and retrieval-augmented generation. In a market pipeline, it enables fast lookup of the news or documents most relevant to a stock or question.
In Simple Terms
It is a search engine for meaning. Instead of matching keywords, it stores the number-based fingerprints of many documents and quickly finds the ones closest in meaning to what you asked.
Example
Given a query about a bank's exposure to interest rates, a vector database returns the most semantically related filings and headlines, even ones that never use those exact words.