Tool AI generally refers to a type of AI which is used as a tool by the creators which gives them suggestions, but doesn't actually do anything in the real world, rather than being an agent with its own action and goal-seeking behavior. Something like Google Maps, which uses AI to plan the best route, but which doesn't drive your car for you.

This is meant as opposed to something like "agentic AI", where the AI has a goal and can plan and will take actions by itself to reach its goal.