If you’re following developments in AI, you’ve likely come across the term RAG (Retrieval-Augmented Generation). But what does it mean, and why is it important for your business?

RAG refers to a process where a Large Language Model (LLM)—such as ChatGPT—retrieves specific, relevant information from a connected data source to enhance the quality of its generated responses.

Instead of relying purely on its pre-trained knowledge, the LLM pulls real-time, contextual data to answer questions more accurately.

For example, if you’re asking about a shipment status, an LLM using RAG would search your internal systems for the latest shipment data and provide a precise, up-to-date response.

This is where a strong data strategy becomes crucial. Because if your data is scattered across operational silos, unstructured, or poorly maintained, an LLM won’t be able to retrieve the right information to answer your questions effectively.

So, if you want to use AI in your business, as an agent, you better get your data strategy right.

All the Best,

Tucker

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