Negative keywords are terms you exclude so your ads don't show for irrelevant searches. They protect budget from off-intent clicks, for example blocking "free", "jobs", or a competitor's brand. They can be applied at ad group, campaign, or account level, and now to Performance Max as well.
Match types, and the close-variant catch
Negatives come in broad, phrase, and exact match, but they behave differently from positive keywords in one crucial way: negative keywords do not match close variants. Exclude "flower" and your ad can still show for "flowers". So you have to add the plurals, misspellings, and synonyms you want blocked, not just the root term.
Where they matter most
Tight negatives are what keep a broad-match or Performance Max campaign from drifting into junk traffic, and what keep a competitor-conquest campaign off your own brand. Reviewing the search terms report and adding negatives is one of the highest-return maintenance jobs in any account. They are also what keeps the competitor Performance Max campaign in the three-campaign B2B setup pointed at the right traffic.