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Glossary · AI building blocks

Hallucination (AI)

Also called confabulation.

Definition

When an AI model produces information that is false or made up, presented as if it were true.

Last updated

What it is.

A language model writes the most likely continuation of the text, not a looked-up fact. When it lacks the information, it can still produce fluent, confident text: a citation that does not exist, a wrong figure, a policy that was never written.

It cannot be removed entirely, but it can be made much rarer and easier to catch. Grounding answers in your own data with RAG, using tool calling for live facts, asking for citations and checking them, and allowing the model to say it does not know all help.

Why it matters

In business software a confident wrong answer can be worse than no answer: a wrong dosage, a wrong contract term, a wrong refund amount. Products that use AI for facts need a design that makes errors visible and checkable, plus human review where the stakes are high.

Watch out

Common mistakes.

  1. 01

    Trying to fix it with prompt wording alone instead of grounding and checks.

  2. 02

    Hiding sources from users, so they cannot verify answers.

  3. 03

    Not measuring it. Track the rate in evals and in production samples.

Tools

Work it out with a tool.

Related

Related terms.

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