In the last few years, we have seen the boom of Artificial Intelligence and Large Language Models. It has already changed the way distributors interact with their clients from their day-to-day conversations and marketing strategies.  

More recently, our algorithms have been flooded with jaw-dropping examples of AI tools like Sora generating videos that bend reality itself. The line between what’s real and what’s artificial is blurring fast. 

Within the treachery of distinguishing between reality and AI lies another problem, artificial intelligence hallucinations.  

Recently, Deloitte was under fire for using AI Hallucinations in a report. The report was “full of fabricated references” resulting in Deloitte having to retract their initial report and repay the Australian government for their hallucinatory report.  

So, what is an AI hallucination? And how can distributors avoid taking fiction as a fact?  

What is an AI Hallucination?  

OpenAi describes AI hallucinations as plausible but false statements generated by language models.  In simple terms, hallucinations happen when AI tries to fill in the blanks with a response that sounds right based on your prompt but isn’t correct. 

For example, if you ask an easily accessible LLM (Large Language Model) like ChatGPT asking for a reference like “create a table on 2025 spending trends for big tech” It’s not going to have that information available so it may create a confident answer based on articles and sources that don’t exist; this is why it is referred to as a hallucination. 

What causes AI Hallucinations?  

Most AI language models are not equipped with real time data and rely on predicting what would come next; NOT fact-checking.  

Common causes include: 

• Outdated or incomplete data 

• Vague prompts or requests 

• Overconfidence in the AI tool 

• No verification step or checking sources

How to identify an AI Hallucination 

Using these quick steps you can identify if your AI response is based in fact or if it’s a hallucination: 

• Ask for sources  

• Cross-check claims  

• Use multiple tools  

• Watch for specifics  

• Keep a human in the loop – AI is a tool. Your expertise and judgment are what make the final message credible. 

Remember, AI is just a tool, it cannot predict the future, and it should not be an author. However, AI can be an incredible asset for distributors. But without a layer of human oversight, even the smartest AI can hallucinate. 

You can uncover practical sales actions, tips, and AI use cases that drive quick wins on our resources page at https://aimsmarter.com/free-resources