In my previous blog post, we explored how Retrieval-Augmented Generation (RAG) queries can address data privacy concerns when using large language models (LLMs). Still, privacy is just one piece of the puzzle when it comes to trustworthy AI. Let’s delve deeper into how RAG queries can help mitigate another major challenge: hallucinations.

Large Language Models (LLMs) are revolutionizing the way we interact with information. A major hurdle in their widespread use is the potential for hallucinations – fabricated information presented as factual responses. RAG queries offer a promising solution to mitigate this issue, ensuring your AI stays grounded in reality.

The Hallucination Problem

Imagine asking a librarian a question and are told –confidently– about a book that doesn’t exist. That’s essentially what happens with LLMs that hallucinate. They might generate seemingly coherent responses that lack factual basis. In essence, AI hallucinations occur when an AI system generates inaccurate information. Inaccurate information can be misleading, lead to poor decision-making, and erode trust in AI systems.

Enter RAG Queries: The Librarian with a Fact-Checker

Think of RAG queries as a two-part system:

  1. The Librarian (Retrieval): This stage involves searching through a massive dataset of information representations, not the raw data itself. These representations can be anonymized summaries, keywords, or other techniques that capture the meaning without revealing the details. This librarian-like function ensures data privacy is maintained.
  2. The Fact-Checker (Augmented Generation): Once the librarian identifies the most relevant information, the fact-checker comes into play. This can involve two approaches, depending on your specific use case:
  • Extractive Question Answering (EQA): Like a skilled researcher, the EQA model scans the retrieved information to find the exact answer phrasing within it. This prioritizes factual accuracy by focusing on existing information.
  • Generative Question Answering (QA): This method uses a large language model (LLM) to understand the context of the question and the retrieved information. The LLM, like a well-informed writer, can then generate a concise and informative response based on its understanding, even if the answer isn’t phrased the same way in the retrieved information.

How RAG Reduces Hallucinations

By grounding the answer generation process in real information, RAG queries significantly reduce the chances of hallucinations:

  • Focus on Real Data: The retrieval system works with anonymized representations of real data, not fabricated information.
  • Fact-Checking Mechanisms: Whether through EQA or generative QA focused on retrieved information, RAG ensures the response has a basis in reality.

RAG and Hallucinations: Not a Silver Bullet

While RAG is a powerful tool, it’s important to maintain realistic expectations:

  • Complexity Matters: The effectiveness of RAG in preventing hallucinations can depend on the complexity of the LLM and the quality of the data used for training. It is important to select the correct LLM for the intended use case. The good news is that there are many LLMs to choose from, including open-source ones which are less costly.
  • Focus on the Task: RAG might not be suitable for all tasks, especially those requiring high levels of creative generation.

Benefits for Businesses

By reducing AI hallucinations, RAG models provide more reliable, trustworthy outputs that mitigate risk for companies making high-stakes decisions. I’ve already mentioned these in my previous blog on RAG and Privacy, but here are some potential business use cases:

  • Question Answering on Internal Data/Knowledge Bases: RAG can empower employees to find accurate and relevant information from a company’s internal documents, policies, or FAQs, reducing reliance on manual searches and potential misunderstandings.
  • Analyzing Customer Feedback and Survey Responses: RAG can help businesses extract key insights from customer feedback and surveys by identifying recurring themes and sentiments without the risk of the LLM misinterpreting information.
  • Summarizing Research Reports and Documents: RAG can generate concise and accurate summaries of complex research reports or lengthy documents, saving time for busy professionals and ensuring key takeaways are not missed.
  • Generating Data-Driven Marketing/Sales Copy: RAG can leverage real customer data and market trends to create data-driven marketing and sales copy that resonates with the target audience, reducing the risk of misleading or inaccurate claims.

The Future of RAG and Trustworthy AI

RAG queries are a significant step towards fostering trust in AI by mitigating the risk of hallucinations. As research continues, we can expect further advancements in:

  • Privacy-Preserving Techniques: New methods to anonymize data and limit LLM access to sensitive details will continue to be developed.
  • Explainable AI: Making the reasoning process behind AI responses more transparent will further build trust in the information provided.


The good news is that advancements like Retrieval-Augmented Generation (RAG) are making AI even more reliable for small and medium-sized businesses (SMBs). RAG tackles hallucinations head-on by grounding the AI’s outputs in real-world data. This means the AI consults trustworthy sources before generating responses, significantly reducing the risk of fabricated information. With RAG, SMBs can leverage AI with even greater confidence, knowing their decisions are based on a foundation of accurate information. Even better, many AI solutions priced specifically for SMBs now incorporate RAG technology, making robust and reliable AI more accessible than ever.

Don’t let concerns about hallucinations hold you back from exploring the potential of AI for your business. Explore how RAG queries can transform your SMB and unlock a new era of growth and efficiency. The 2Go Advisory Group’s Practical AI Practice Group is here to help you navigate the world of AI and implement solutions like RAG queries that are tailored to your specific needs. Contact us today to learn more!

Katrina Montinola – Practical AI Practice Group Lead

Katrina Montinola leads the Practical AI Practice Group and brings over 25 years of experience as a technology executive and advisor, building and leading engineering teams in Silicon Valley. She offers deep expertise in software development strategies, recruiting top technical talent, managing onshore and offshore teams, and cultivating inclusive company cultures.

Learn more about our services at www.2goadvisorygroup.com/practice-areas/practical-artificial-intelligence or contact Katrina at kmontinola@coos2go.com or +1 (650) 346-3880.