Definition
A technique where an AI retrieves relevant documents from a knowledge base before generating a response. Improves accuracy on factual queries and reduces hallucination.
Why it matters
RAG is what lets an AI answer questions about a specific business, quoting its actual prices, hours, policies, and service list, instead of guessing from general training. For an owner, this is the difference between an assistant that says 'contact us for details' and one that gives a customer the right answer on the spot. The catch is that the AI is only as accurate as the documents behind it, so out-of-date price sheets or policies quietly become out-of-date answers.