The infiltration of AI into various aspects of modern daily life raises questions about whether we are prepared to understand, use and interact with it. This is where AI literacy, a combination of theoretical knowledge and practical and critical thinking skills related to artificial intelligence, comes in. This article explores the capabilities and knowledge we must empower our students to develop. Using ChatGPT as an example, students must know how large language models work and how the tool was trained for tasks like question answering. They need to know how to write prompts to get relevant answers to their questions. They must understand that the chatbot is trained on data from diverse internet sources such as books, articles and encyclopedias and incorporates human feedback. They must be able to evaluate the responses it gives to decide whether to accept them.