AI Hallucinations
What it means when AI lies, and how companies eliminate this risk.
An AI Hallucination refers to the phenomenon where an Artificial Intelligence invents facts and presents them convincingly as truth.
Why does AI hallucinate?
An LLM is essentially a system that calculates probabilities. If it lacks knowledge, it doesn’t search for the “truth”; it calculates the most likely next word. This leads to plausible-sounding lies.
How businesses solve this
For B2B processes, hallucinations are unacceptable. The solution is the RAG Architecture:
- The model is restricted from answering freely.
- It is fed a specific company document (e.g. an invoice).
- The prompt is: “Answer the question exclusively based on this document. If the info is missing, say ‘I don’t know’.”
Frequently Asked Questions
Will hallucinations disappear in the future?
Probably never entirely, as it's inherent to LLMs. But with RAG, they can be reduced to near zero for business use.