What is an AI hallucination?
A hallucination is when an AI states something that is not true, often in a confident tone. It may invent a price, a policy, a citation, or a step.
In plain English
The model is trying to complete the pattern. If you did not give it the fact, it may fill the gap. That is annoying in a brainstorm and expensive in a quote, a reminder, or a job post. The fix is not 'try harder.' The fix is: give the facts, demand a citation or a blank, and have a person read customer-facing text. Leave a blank on purpose. If the fee is not in the notes, the draft should say the fee is missing, not invent a round number that sounds like your usual rate. Read every digit before a customer sees it. Confidence is free for the model. It is not evidence.
How an owner would use it
Ban invented numbers in the system prompt. Use prompts on this site that leave blanks instead of sample prices. If the draft contains a fee, a date, or a law you did not type, delete it.
Common mistakes
Telling the model 'do not hallucinate' does almost nothing. The useful bans are specific: do not add a price, a date, a law, or a citation that was not in the notes. Another miss is treating a confident tone as evidence. Hallucinations show up most when the prompt has a gap the model is embarrassed to leave blank. Require the word UNKNOWN. If you need a source, use grounding and then open the source. A knowledge cutoff makes this worse for anything that changed after the model was trained.
A worked example
A small marketing agency
The discount that was never offered
This is an illustration, not a customer result. A draft follow-up offered 10 percent off. Nobody had approved a discount. The producer deleted the line. The system prompt gained one rule: do not add an offer that is not in the notes.
Related terms
Prompts and guides
Questions owners ask
What is an AI hallucination?
It is an answer that sounds fluent but is not true. Common small-business versions are invented prices, fake policies, and steps nobody actually uses.
How do I reduce hallucinations?
Paste the facts, tell the model to leave a blank when a fact is missing, ground answers in your files, and read anything a customer will see.
Is a wrong tone a hallucination?
No. A stiff or chatty draft can still be factually fine. A hallucination is a claim that is not true. Fix tone in the instructions. Fix invented facts by providing the facts and checking them.
Product guides are on AI apps for business.