Enterprise AI Glossary · Reviewed June 2026
Hallucination
A confident-sounding output that is not grounded in the retrieved or provided evidence.
What is Hallucination?
Hallucinations are reduced — not eliminated — by good retrieval, citations, and evaluation. In an enterprise setting, the more dangerous failure mode is a hallucinated action, not a hallucinated answer: an agent that fabricates a justification for the wrong tool call. See Private RAG vs Enterprise Search and Agent Evaluation.
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