Modern AI Engineering

Lesson 12.7 · 27 min · video lesson

Claude Code: AI-Powered Software Engineering at the CLI

How does an AI go from “here is a code snippet, good luck pasting it” to actually opening our files, running our tests and fixing the bug itself?

In short: Claude Code is Anthropic's agentic coding tool. It runs a Claude model in an agent loop with real tools (read and edit files, search with patterns, run shell commands) inside our project, so it can gather context, make changes and verify them by running tests. Project instructions live in CLAUDE.md, permission rules keep us in control of risky actions, and plan mode, subagents and hooks let us shape how it works. It is a clear real-world example of harness and loop engineering.

What you will learn

  • What is Claude Code?
  • The problem with a normal AI chatbot
  • The agent loop
  • The tools of Claude Code
  • Example: Claude Code fixing a bug
  • How does Claude Code search a big project?
  • How does Claude Code verify its own work?
  • CLAUDE.md: The project memory
  • Permissions: How we stay in control
  • Plan mode, subagents, and hooks
  • Putting it all together

In this lesson

  1. What is Claude Code?
  2. The problem with a normal AI chatbot
  3. The agent loop
  4. The tools of Claude Code
  5. Example: fixing a bug
  6. Searching a big project and verifying the work
  7. CLAUDE.md: the project memory
  8. Permissions: how we stay in control
  9. Plan mode, subagents and hooks
  10. Worked example, step by step
  11. Practice: try it yourself
  12. Putting it all together

Key terms in this lesson

Agentic coding tool
A tool where an AI model acts in a codebase (reads, edits, runs commands) in a loop toward a goal.
Agentic search
Finding relevant code by having the model call search and read tools step by step.
CLAUDE.md
A Markdown file of project instructions that Claude Code loads into context at session start.
Permission mode
A setting that controls which actions Claude Code may take without asking, such as plan mode or auto-accepting edits.
Subagent
A helper agent with its own context window and tools that handles a delegated sub-task and returns a summary.
Hook
A user-defined shell command the harness runs automatically at a lifecycle event, able to add checks or block actions.

This lesson is part of the Generative AI Engineering and Complete AI Engineer tracks. See plans and pricing to open the full lesson, its video, labs and quiz, or try the free lesson first (free account needed).

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