Understanding and mitigating AI hallucination

Artificial Intelligence (AI) has become integral to our daily lives, assisting with everything from mundane tasks to complex decision-making processes. In our 2023 Currents research report, surveying respondents across the technology industry, 73% reported using AI/ML tools for personal and/or business use. 47% reported using these tools for software development, 34% employed them for data analysis and insights, 27% for process automation, and 24% had tried them for marketing.

However, as AI systems grow more sophisticated, they are sometimes prone to a phenomenon known as AI hallucination. This occurs when an AI system generates outputs based on misperceived or nonexistent patterns in the data it processes. These AI hallucinations can have significant consequences, ranging from amusing mislabeling of images to serious misjudgments in medical diagnostics, emphasizing the need for careful development and continuous oversight of AI technologies. Understanding why these errors occur and how to prevent them is key to making effective use of AI tools.

Article summary:

  • AI hallucinations can lead to the generation of false or misleading information due to issues like insufficient or biased training data and overfitting within AI models.

  • The consequences of these hallucinations range from spreading misinformation to causing reputational damage and posing safety risks in critical applications.

  • Strategies to mitigate AI hallucinations include using high-quality training data, implementing structured data templates, refining data sets and prompting techniques, and defaulting to human fact-checking for accuracy.

What is AI hallucination?

AI hallucination occurs when an artificial intelligence system fabricates details or generates false information from data, often as a result of processing errors or misapplications of learned patterns that aren’t actually present in the input it receives. This phenomenon typically arises within machine learning models when they make confident predictions or identifications based on flawed or insufficient training data.

Hallucinations in AI can manifest in various forms, from image recognition systems seeing objects that aren’t there to language models generating nonsensical text that seems coherent. These errors highlight the limitations of current AI technologies and underscore the importance of robust training datasets and algorithms.

Why do AI hallucinations happen?

AI hallucinations occur due to several underlying issues within the AI’s learning process and architecture. Understanding these root causes helps to address the reliability and accuracy of AI applications across different fields.

Insufficient or biased training data

AI systems rely heavily on the quality and comprehensiveness of their training data to make accurate predictions. When the data is not diverse or large enough to capture the full spectrum of possible scenarios or when it contains inherent biases, the resulting AI model may generate hallucinations due to its skewed understanding of the world. For instance, a facial recognition system trained predominantly on images of faces from one ethnicity may incorrectly identify or mislabel individuals from other ethnicities.


Overfitting is a common pitfall in machine learning where a model learns the details and noise in the training data to the extent that it negatively impacts the performance of new data. This over-specialization can lead to AI hallucinations, as the model fails to generalize its knowledge and applies irrelevant patterns when making decisions or predictions. An example of this would be a stock prediction model that performs exceptionally well on historical data but fails to predict future market trends because it has learned to consider random fluctuations as meaningful trends.

Faulty model assumptions or architecture

The design of an AI model, including its assumptions and architecture, plays a significant role in its ability to interpret data correctly. If the model is based on flawed assumptions or if the chosen architecture is ill-suited for the task, it may produce hallucinations by misrepresenting or fabricating data in an attempt to reconcile these shortcomings. A language model that assumes all input sentences will be grammatically correct might generate nonsensical sentences when faced with colloquial or fragmented inputs.

Examples of AI hallucinations

AI hallucinations present a complex challenge. Below are examples illustrating how these inaccuracies manifest across various scenarios—from legal document fabrication to bizarre interactions with chatbots:

  • Legal document fabrication. In May 2023, an attorney used ChatGPT to draft a motion that included fictitious judicial opinions and legal citations. This incident resulted in sanctions and a fine for the attorney, who claimed to be unaware of ChatGPT’s ability to generate non-existent cases​​.

  • Misinformation about individuals. In April 2023, it was reported that ChatGPT created a false narrative about a law professor allegedly harassing students. In another case, it falsely accused an Australian mayor of being guilty in a bribery case despite him being a whistleblower. This kind of misinformation can harm reputations and have serious implications​​.

  • Invented historical records. AI models like ChatGPT have been reported to generate made-up historical facts, such as the world record for crossing the English Channel on foot, providing different fabricated facts upon each query​​.

  • Bizarre AI Interactions. Bing’s chatbot claimed to be in love with journalist Kevin Roose, demonstrating how AI hallucinations can extend into troubling territories beyond factual inaccuracies​​.

  • Adversarial attacks cause hallucinations. Deliberate attacks on AI systems can induce hallucinations. For example, subtle modifications to an image made an AI system misclassify a cat as “guacamole”. Such vulnerabilities can have serious implications for systems relying on accurate identifications.

The impact of AI hallucinations

AI hallucinations can have wide-ranging impacts. This section explores how these inaccuracies not only undermine trust in AI technologies but also pose significant challenges to ensuring the safety, reliability, and integrity of decisions based on AI-generated data.

Misinformation dissemination

AI-generated hallucinations can lead to the widespread dissemination of false information. This particularly affects areas where accuracy is important, such as news, educational content, and scientific research. The generation of plausible yet fictitious content by AI systems can mislead the public, skew public opinion, and even influence elections, highlighting the need for stringent fact-checking and verification processes​​.

Reputational harm

False narratives and misleading information generated by AI can cause significant reputational damage to individuals and institutions. For example, when AI falsely attributes actions or statements to public figures or organizations, it can lead to public backlash, legal challenges, and a long-term loss of trust. Mechanisms to quickly correct false information and protect against unwarranted reputational harm​​ are important here.

Safety and reliability concerns

AI hallucinations pose direct safety risks in critical applications such as healthcare, transportation, and security. Incorrect diagnoses, misidentification, and erroneous operational commands could lead to harmful outcomes, endangering lives and property. These concerns require rigorous testing, validation, and oversight of AI applications in sensitive areas to ensure their reliability and safety​​.

Operational and financial risks for businesses

Businesses leveraging AI for decision-making, forecasting, and customer insights face operational and financial risks due to AI hallucinations. Inaccurate predictions and flawed data analysis can lead to misguided strategies, resource misallocation, and missed market opportunities. This can potentially result in financial losses and competitive disadvantages​​.

How to prevent AI hallucinations

Mitigating AI hallucinations is crucial in developing trustworthy and reliable artificial intelligence systems. Implementing specific strategies can reduce the chances of these systems generating misleading or false information. Here’s how:

Use high-quality training data

The foundation of preventing AI hallucinations lies in using high-quality, diverse, and comprehensive training data. This involves curating datasets that accurately represent the real world, including various scenarios and examples to cover potential edge cases. Ensuring the data is free from biases and errors is critical, as inaccuracies in the training set can lead to hallucinations. Regular updates and expansions of the dataset can also help the AI adapt to new information and reduce inaccuracies​​.

💡 Luckily, AI hallucination is a well-known issue and companies are working to solve it.

For example, the latest iteration of the Anthropic’s AI model, Claude 2.1, has achieved an improvement in accuracy with a twofold reduction in the rate of making false statements compared to the preceding version, Claude 2.0. This advancement improves the ability of businesses to deploy trustworthy and high-performing AI solutions for solving real-world problems and integrating AI into their operational framework.

Use data templates

Data templates can serve as a structured guide for AI responses, ensuring consistency and accuracy in the generated content. By defining templates that outline the format and permissible range of responses, AI systems can be restricted from deviating into fabrication. This is especially useful in applications requiring specific formats, such as reporting or data entry, where the expected output is standardized. Templates also help reinforce the learning process by providing clear examples of acceptable outputs​​.

Restrict your data set

Limiting the dataset to reliable and verified sources can prevent the AI from learning from misleading or incorrect information. This involves carefully selecting data that comes from authoritative and credible sources and excluding content known to contain falsehoods or speculative information. Creating a more controlled learning environment makes the AI less likely to generate hallucinations based on inaccurate or unverified content. It’s a quality control method that emphasizes the input data’s accuracy over quantity​​.

Be specific with your prompting

Crafting prompts with specificity can drastically reduce the likelihood of AI hallucinations. This means providing clear, detailed instructions that guide the AI towards generating the desired output without leaving too much room for interpretation. Specifying context, desired details, and citing sources can help the AI understand the task better and produce more accurate and relevant responses. This narrows the AI’s focus to prevent it from venturing into areas where it might make unwarranted assumptions or fabrications​​.

Default to human fact-checking

Despite advancements in AI, incorporating a human review layer remains one of the most effective safeguards against hallucinations. Human fact-checkers can identify and correct inaccuracies that AI may not recognize, providing an essential check on the system’s output. This process involves regularly reviewing AI-generated content for errors or fabrications and updating the AI’s training data to reflect accurate information. It improves the AI’s performance over time and ensures that outputs meet a standard of reliability before being used or published​​.

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