The video introduces the concept of compound AI systems. AI agents are a type of compound AI system that uses a large language model (LLM) as the central component. Andrew Ng explains Agentic AI. He explains the string of reasoning that can be accomplished by agents. AI agents are able to reason through problems and come up with plans to solve them. They can also access memory and learn from past interactions. This makes them much more useful, adaptable and human thought-like than traditional AI models. (GenAI assisted with the summary of the video)