Hallucination
A hallucination is when a model generates information that sounds plausible but is factually wrong or made up.
Analogy
Like a confident student who doesn't know an answer but invents one rather than admit it.
Why it matters
Hallucinations can put fake data into your CRM or send wrong info to leads, so you must add grounding and validation in automated flows.
In practice
The model invents a customer's order number that was never in the data you gave it.