AI

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.

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