Ambient occlusion (often shortened to AO) is the soft darkening that appears where two surfaces meet, like the corner where a wall hits the ceiling, the underside of a sofa cushion against the frame, or the seam where a vase touches a tabletop. It approximates the way ambient light is blocked from reaching tight crevices — without it, rendered scenes feel slightly floating and unconvincing.
In photorealistic rendering, ambient occlusion is one of the cheapest ways to add perceived depth and material credibility. The eye reads AO as 'this object is actually sitting on that surface' rather than 'this object is hovering near that surface'. Almost every photoreal render relies on AO whether the rendering engine computes it explicitly or it arrives baked into global illumination.
In AI rendering, AO is implicit in the output — you don't have to ask for it, the model has learned what surface contact looks like in photographs. The way to control it in a prompt is by asking for 'naturalistic ambient occlusion' or 'soft contact shadows' when the result feels too floaty, and by avoiding any direction toward 'flat lighting' or 'no shadows' which would push the AI to suppress AO.
See also