You probably have used LLMs to generate images, code, charts, pptx file, docs and the response is not even texts anymore, but instead it shows up as something you can edit, tweak, or even download. So, what is this thing?
It's Artifact. An artifact is a structured output that the LLM generates for you during the conversation that is meant to be used and modified, and not just read.
Now you may wonder, "Does this mean plain generated text is also an artifact?". Well, not quite. The generated text is called AI response. An LLM typically generates text that you can read or copy and that’s about it, but an artifact can do more than that.

"You can think of it like this:
AI response = texts someone sent to you. You only read and may copy
AI artifacts = files someone sent to you. You view, edit, and may download"
Example of Artifacts

In another example above, I asked Claude to visit tinaCMS and summarize their installation steps by writing them all down on Markdown. As you can see, you can view it, download as md, and even download as a pdf format.
When to use artifacts
It depends on your needs. If you don't want to spend hours on creating or modifying things e. g writing a summary, writing codes, etc, then you may want to use artifact. However, if you feel like text response is enough, artifact may be an overkill
Conclusion
Artifact is an output generated by an LLM that is meant to be viewed, edited, or even interacted with. It is a difference between AI that sends you texts and AI that creates something to be used