---
title: AI Hallucination – AI Abstraction
canonical_url: https://ai-abstraction.com/glossary/ai-hallucination/
description: When an AI model states something confidently that is actually wrong or made up, rather than saying it doesn't know.
last_modified: 2026-07-29
---

Glossary

# AI Hallucination

When an AI model states something confidently that is actually wrong or made up, rather than saying it doesn’t know.

A hallucination is a wrong or invented answer that an AI model presents as if it were fact. It’s one of the biggest risks of AI in a business setting, especially for anything involving prices, policies, or legal claims. AI Abstraction reduces hallucinations by grounding agents in a business’s real documents through RAG and testing responses before launch, rather than relying on a model’s general knowledge alone.

[See every term in the glossary](/glossary/)

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## About AI Abstraction

AI Abstraction designs, builds, hosts, and maintains AI agents and workflow automation for small and mid-sized businesses. Based in Ridgewood, NJ, serving the New York–New Jersey metro area and remotely nationwide. Call 551-246-4338 or visit https://ai-abstraction.com/contact/.