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Why RAG Systems Hallucinate Even When Retrieval Works

This story is from 2026-08-25. It is preserved in the archive; the latest stories are on the live feed.

Imagine you are building an internal AI assistant for a company's HR team. An employee asks: “Can I get a refund for my annual software subscription if I cancel within 30 days?” The company's knowledge base contains the answer. Somewhere inside a 40-page billing policy, it says: Refunds are availab…

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  1. 2026-08-25 14:44 · DEV Community — AI
    Why RAG Systems Hallucinate Even When Retrieval Works

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