API is the acronym for Application Programming Interface. It works as a software intermediary that allows two applications to talk to each other securely.
When you use an application connected to the Internet, it sends data to a server. The server retrieves that data, interprets it, performs the necessary actions, and sends it back to your device. The application then interprets that data. Finally, it is presented to you, the user, in a universally understood and easy-to-use way. All of this happens via an API. It shares data, resources, even software across different applications without compromising privacy and maintaining a layer of abstraction.
Modern APIs adhere to standards (typically HTTP and REST) that are developer-friendly, easily accessible, and understood broadly. They are treated more like products than code and designed for specific audiences like mobile developers. According to MuleSoft, APIs have become so valuable that they comprise a large part of many businesses' revenue, like Google, eBay, Salesforce.com, Amazon, Expedia, etc.