A generative model that learns to create images (or other data) by gradually denoising random noise — the technology behind tools like Stable Diffusion and DALL·E.
Friendly Description: A diffusion model is a clever kind of AI that creates images by starting with pure visual noise (like TV static) and gradually cleaning it up into a real picture. Imagine a sculptor staring at a rough block of marble and slowly chiseling away to reveal a statue inside. That's how diffusion models work, except the "marble" is random pixels and the "chisel" is an AI guided by your description.
Example: If you type "a cozy cabin in a snowy forest at sunset" into an image generator like Stable Diffusion, the model starts with a noisy image and, step by tiny step, refines it until a beautiful illustration of exactly that scene appears. It can produce art in seconds that used to take a human illustrator hours.