AJAX is a technique that uses JavaScript and XML to provide instantaneous responses to user inputs without reloading the page, while Java is a programming language that can be used for server-side applications. AJAX is often seen as more efficient for web applications due to its ability to handle user interactions quickly, whereas Java applets can be resource-intensive and require plugins. Both technologies can be used together to enhance web applications, allowing Java to handle server-side logic while AJAX manages client-side interactions. However, Java's server-side components, like JSP, do not update instantly without AJAX. The discussion emphasizes that while AJAX and Java serve different purposes, they can complement each other in web development.