AI Hallucination
When an AI model states something false or invented as if it were fact.
An AI Hallucination is when a model produces confident but incorrect or invented information — a wrong price, a made-up policy, a non-existent feature. It happens because language models predict plausible text, not verified truth. Responsible business AI reduces hallucinations with RAG (grounding in real data), guardrails, and escalation to a human when unsure.