The words get used interchangeably, but the distinction is practical and it affects cost, risk and what the thing can actually do for you.
Chatbot: answers questions
A chatbot takes a question and returns an answer, from a script, a knowledge base, or a language model. Its output is text. Good chatbots deflect common questions and hand the rest to a person.
Best for: FAQs, first-line support, guiding people to the right page or form.
Risk profile: low. The worst case is a wrong or unhelpful answer, which a person can correct.
AI agent: answers and acts
An agent can do everything a chatbot does, and also take actions in your systems within rules you set: create a ticket, book a slot, update a CRM record, escalate a case with a summary.
Best for: work where the outcome is a change in a system, not just a reply. Routing with context, triage that updates records, multi-step lookups that end in an action.
Risk profile: higher. Because it acts, the boundaries, the “must never do” list, the escalation path, the human review points, matter much more.
How to choose
If the job is “tell people things”, a chatbot is enough and safer. If the job is “handle this end to end”, you need an agent, with the controls that come with it.
The sensible progression
Start with an assistant that answers well and hands off cleanly. Once that is trusted, give it the ability to take specific, bounded actions. Do not start by letting an unproven system act.
How XP Labs approaches it
XP Labs scopes to one job, defines the boundaries first, keeps a human in the loop where it matters, and only widens what the system can do once it has earned it. The planning conversation works out which you need. See what is an AI agent and the AI agents overview.