Encyclopedia
AI hallucination
What an AI hallucination is, why language models produce them, and how business systems reduce them.
AI hallucination is when an AI model produces an answer that sounds confident and plausible but is factually wrong or made up.
Why models hallucinate
A language model generates the most likely next text rather than looking up verified facts. Most of the time the likely text is also correct, but when the model lacks the real answer it can still produce fluent, confident text that happens to be wrong. It is a property of how the technology works, not a simple bug to switch off.
How business systems reduce it
- Grounding: connect the model to a knowledge base so it answers from real content, the core idea behind retrieval-augmented generation.
- Tools: have it look up live data, like an order status, instead of guessing.
- Boundaries: let it say it does not know and hand off to a human rather than invent an answer.
- Review: sample conversations to catch and correct wrong answers.
From reference to practice
Turn what you just read into a working AI agent on your own customer contact. Start free, no credit card needed.