Glossary
What is Hallucination?
When an AI states something false as if it were fact, such as a price, a policy or a source that does not exist.
Also written as hallucinate.
An LLM writes the most plausible next words. Usually that produces correct answers, but when it lacks the information it can produce something that sounds right and is not. That is a hallucination.
How businesses keep it in check
- Give the AI your real information (through RAG or connectors) instead of asking it to remember.
- Tell it what to do when it does not know: say so, and offer a person.
- Keep a human reviewing anything that goes to a client, a contract or a price, at least until you trust the setup.
- Ask for sources, and check them.
The practical takeaway
Hallucination is a reason to design AI carefully, not a reason to avoid it. A well built assistant that answers only from your documents rarely invents anything.
