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What is Retrieval Augmented Generation (RAG)? A comprehensive guide

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Imagine asking GPT-3 a seemingly straightforward question like, “Who won the last FIFA World Cup?” and receiving a confidently incorrect answer: “The French national football team.” It’s a puzzling situation, especially when you know that the last World Cup took place in Qatar in 2022, and Argentina emerged as the champion. So, why do you think the LLM has answered the question incorrectly?

Although the French football team has won the FIFA World Cup, it was back in 2018. GPT-3, as impressive as it is, has its knowledge restricted to information available up until September 2021. Consequently, it’s as if the LLM is frozen in time, its awareness unable to reach beyond that date.

Pre-trained language models have demonstrated the ability to acquire significant in-depth knowledge from data. They do so by learning from a large corpus of text and storing this knowledge as parameters within the model. Despite their knowledge storage capabilities, these models have limitations. They cannot easily expand or update their knowledge base and also provide transparency in their decision-making. This can result in LLMs confidently providing incorrect answers to user queries, essentially hallucinating, and users accepting the inaccurate responses as correct. In such scenarios, Retrieval Augmented Generation (RAG) saves the day by helping LLMs retrieve real-time data from the Internet with proper sources.

What is Retrieval Augmented Generation (RAG)?

Retrieval Augmented Generation (RAG) is an advanced Natural Language Processing (NLP) technique that combines both retrieval and generation elements to enhance AI language models’ capabilities. RAG is designed to address some of the limitations of LLMs, such as static knowledge, lack of domain-specific expertise, and the potential for generating inaccurate or “hallucinated” responses.

The RAG model typically consists of two main components:

  • Retriever: This component is responsible for retrieving relevant information from a large knowledge base, which can be a collection of documents, web pages, or any other text corpus. It uses techniques like dense vector representations (e.g., using neural embeddings) to efficiently identify and rank documents or passages containing relevant information for the given task.
  • Generator: The generator is responsible for taking the retrieved information and generating coherent and contextually relevant responses or text. It is often a generative language model, such as GPT (Generative Pre-trained Transformer), which is fine-tuned to produce high-quality text based on the retrieved context.

The key idea behind RAG is to leverage the strengths of both retrieval and generation models. Retrieval models excel at finding relevant information from a large dataset, while generation models are good at producing natural language text. By combining these two components, RAG aims to produce highly accurate and contextually relevant responses or text generation for tasks like question answering, document summarization, and chatbot applications.

The need for RAG

Large Language Models store vast amounts of information within their parameters. They can be fine-tuned for specific downstream tasks to provide state-of-the-art results in various natural language processing applications. However, these models have inherent limitations:

  • Memory constraints: LLMs have a limited capacity to store and update knowledge. Their knowledge is primarily stored as static parameters and cannot easily be expanded or revised.
  • Lack of provenance: LLMs struggle to provide insights into how they arrive at specific answers, making it challenging to understand the reasoning behind their responses.
  • Potential for “hallucinations”: These models may generate responses that are factually incorrect or disconnected from reality.
  • Lack of domain-specific knowledge: LLMs are trained for generalized tasks and lack domain-specific knowledge. They do not possess insights into a company’s private data, rendering them ineffective at answering domain-specific or company-specific questions accurately.

Parametric memory vs. non-parametric memory

The traditional approaches to address these limitations involve either costly fine-tuning of models, creating entirely new foundation models, or employing prompt engineering techniques. Each of these methods has its drawbacks, including high costs, resource-intensive processes, and challenges in keeping models up-to-date. However, a new approach proposed by researchers combines two forms of memory, parametric and non-parametric memory, to resolve the limitations of LLMs.

Parametric memory: This represents the traditional knowledge stored within the parameters of the model. It’s the implicit knowledge base that LLMs possess. However, it has limitations in terms of expansiveness and updateability.

Non-parametric memory: This is a retrieval-based memory, explicitly accessing and retrieving information from external sources, such as the Internet. It allows models to update, expand, and verify their knowledge directly. Models like REALM and ORQA have explored this concept by combining masked language models with differentiable retrievers.


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AI systems integrated with RAG retrieve, synthesize, and present information like never before. Contact us today to explore its use cases for your business.

The role of RAG

RAG, or Retrieval Augmented Generation, takes the concept of combining parametric and non-parametric memory to the next level. It’s a general-purpose fine-tuning approach that endows pre-trained language models with a powerful mechanism to access external knowledge while generating text.

In RAG, the parametric memory is represented by a pre-trained seq2seq model, while the non-parametric memory is a dense vector index of sources like Wikipedia. A pre-trained neural retriever, such as the Dense Passage Retriever (DPR), is used to access this external knowledge.

RAG models leverage both forms of memory to generate text. They can condition their output on retrieved passages, providing a dynamic and reliable way to incorporate real-world knowledge into their responses.

Features and benefits of Retrieval Augmented Generation

Retrieval Augmented Generation (RAG) offers several features and benefits that make it a valuable technique in natural language processing and AI applications. Here are some of the key features and benefits of RAG:


  • Real-time data access: RAG allows AI models to access and incorporate real-time or up-to-date information from external sources. This means that the LLM system can provide responses based on the most current data available, improving the accuracy and relevance of answers.
  • Domain-specific knowledge: RAG enables AI models to possess domain-specific knowledge by retrieving data from specific sources. This is particularly useful for specialized tasks or industries requiring precise and specialized information.
  • Reduced hallucinations: RAG reduces the likelihood of generating inaccurate or hallucinated responses. Since it relies on real data to support generated text, it provides a more reliable and contextually accurate output.
  • Transparency: RAG enhances the transparency of AI-generated content. AI systems using RAG can cite the sources they used to generate responses, similar to citing references in research. This feature is especially valuable in applications requiring transparency and auditability, such as legal or academic contexts.

Benefits of Retrieval Augmented Generation

  • Context-aware responses: RAG enables AI models to provide context-aware responses. By retrieving and incorporating relevant information, the AI system can better understand the user’s query and provide answers that consider the question’s context and nuances.
  • Improved accuracy: With access to real-time data and domain-specific knowledge, RAG-driven AI systems can deliver more accurate responses. This is particularly beneficial in applications where precision and correctness are critical, such as medical diagnosis or legal consultations.
  • Efficiency and cost-effectiveness: Implementing RAG can be more cost-effective than other approaches, such as fine-tuning or building entirely new models. It eliminates the need for frequent model adjustments, data labeling efforts, and costly fine-tuning processes.
  • Versatility: RAG can be applied to a wide range of applications, including customer support chatbots, content generation, research assistance, and more. Its versatility makes it suitable for various industries and use cases.
  • Enhanced user experience: Users interacting with RAG-powered AI systems benefit from more accurate and relevant responses. This leads to an improved user experience, higher user satisfaction, and increased trust in AI-powered applications.
  • Adaptability: RAG allows AI models to adapt and learn from new data in real-time without extensive retraining or model rebuilding. This adaptability is essential in dynamic environments where information is constantly evolving.
  • Reduced data labeling: Unlike traditional approaches that may require extensive data labeling efforts, RAG can leverage existing data sources, reducing the need for manual data labeling and annotation.

How RAG works: A technical overview

Retrieval Augmented Generation, in simple terms, enables an LLM to access custom or real-time data. Here’s how RAG facilitates this:

Retrieval process

  • Data sources: RAG starts by accessing external data sources, which can include databases, documents, websites, APIs or any structured information repositories. These data sources may contain vast information, including real-time data and domain-specific knowledge.
  • Chunking: The data from these sources is often too large to process at once. Therefore, it is chunked into more manageable pieces. Each chunk represents a segment of the data and can be thought of as a self-contained unit.
  • Conversion to vectors: The text within each chunk is then converted into numerical representations known as vectors. Vectors are numerical sequences that capture the semantic meaning of the text. This conversion enables the computer to understand the relationships between concepts within the text.
  • Metadata: As the data is processed and chunked, metadata is created and associated with each chunk. This metadata contains information about the source, the context, and other relevant details. It is used for citation and reference purposes.

RAG Based System

Generation process

  • User query or prompt: RAG operates in response to a user query or prompt. The user’s input serves as the basis for generating a response.
  • Semantic search: The user’s query is converted into embeddings or vectors, similar to how the text data was converted earlier. These query embeddings capture the meaning and intent of the user’s input.
  • Searching for relevant chunks: RAG uses these query embeddings to search through the preprocessed chunks of data. The goal is to identify the most relevant chunks that contain information related to the user’s query.
  • Combining retrieval and generation: Once the relevant chunks are identified, RAG combines the retrieved information from these chunks with the user’s query.
  • Interaction with foundation model: This combined user query and retrieved information is then presented to the foundation model, say GPT, to generate a contextually relevant response. This is similar to giving the AI all the puzzle pieces and asking it to complete the picture.

The tools and frameworks used for RAG

Implementing Retrieval Augmented Generation (RAG) requires a combination of tools and frameworks to handle data processing, vector embeddings, semantic search, and interaction with foundation models. Here are some key tools and frameworks commonly used for RAG:

PyTorch or TensorFlow

These deep learning frameworks are often used to build and train custom models for various NLP tasks, including RAG. They provide the infrastructure for developing and fine-tuning models.

Hugging Face Transformers

The Hugging Face Transformers library offers pre-trained models for a wide range of NLP tasks. You can fine-tune these models for RAG applications, making it easier to get started.


Faiss is a popular library for efficient similarity search and clustering of dense vectors. It’s commonly used to perform semantic searches on vector embeddings to retrieve relevant chunks of information.


Elasticsearch is a robust search engine that can be used for semantic search in RAG. It provides capabilities for indexing and querying large volumes of text data.

Apache Lucene

Lucene is the underlying library that powers Elasticsearch. It can be used directly for semantic search and indexing text data.

PyTorch Lightning or TensorFlow Serving

These tools can be employed for serving and deploying your RAG models in production environments, allowing for scalable and efficient inference.


Scikit-learn offers a wide range of ML tools, including tools for clustering and dimensionality reduction. It can complement your RAG implementation.


LangChain is an open-source tool designed for data chunking and preprocessing. It can be used to divide large documents into manageable text chunks.

Azure Machine Learning

If you are working on the Azure platform, Azure Machine Learning provides resources and services for managing and deploying RAG models.

OpenAI’s GPT-3 or GPT-4

If you are using OpenAI’s GPT models as your foundation model, you can leverage the OpenAI API to interact with the model and integrate it into your RAG system.

Custom Data Processing Scripts

Depending on your data sources and requirements, you may need custom scripts for data preprocessing, cleaning, and transformation.

GitHub and Git Version Control

Using version control systems like Git and platforms like GitHub is essential for managing code, collaborating with team members, and tracking changes in your RAG implementation.

Jupyter notebooks

Jupyter notebooks are valuable for experimentation, prototyping, and documenting your RAG development process.


Pinecone is a vector database designed for real-time similarity search. It can be integrated with RAG systems to accelerate semantic search on embeddings.

These tools and frameworks provide a comprehensive ecosystem for building, deploying, and maintaining RAG-based systems. The choice of tools may depend on your specific use case, platform preferences, and scalability requirements.

RAG vs. traditional approaches: A comparison

Aspect RAG Models Traditional Approaches
Retrieval mechanism Combine retrieval and generation Primarily rely on keyword-based retrieval
Information extraction Generate responses based on retrieved-context Extract information directly from documents
Contextual understanding Excel at understanding query and document context Struggle with contextual relevance
Paraphrasing and abstraction Can paraphrase and abstract information Often present extracted information as-is
Adaptability and fine-tuning Fine-tune for specific tasks Require custom engineering for each task
Efficiency with large knowledge bases Efficiently access and summarize knowledge May struggle to scale to large knowledge bases
Real-time updates Can handle real-time knowledge source updates Complex to update and refresh knowledge
Knowledge representation Capture nuanced relationships and semantics Tend to have shallow knowledge representation
Citation generation Generate citations for provenance Lack mechanisms for providing provenance
Performance on knowledge-intensive tasks Achieve state-of-the-art results Performance may lag behind on such tasks

Launch your project with LeewayHertz!

AI systems integrated with RAG retrieve, synthesize, and present information like never before. Contact us today to explore its use cases for your business.

Key considerations for implementing RAG

  • Data sources and integration: Determine the sources of data that RAG will retrieve information from, such as databases, APIs, or custom knowledge repositories. Ensure that these sources are integrated seamlessly.
  • Data quality and relevance: Prioritize data quality and relevance to your specific application. Implement mechanisms to filter and preprocess retrieved data to improve the accuracy of responses.
  • Retrieval strategy: Define a retrieval strategy, including the number of documents to retrieve per query and the criteria for selecting relevant documents. Optimize this strategy based on your application’s requirements.
  • Fine-tuning: Consider fine-tuning the RAG model on domain-specific data to enhance its performance for your use case. Fine-tuning can help align the model’s responses with your specific knowledge domain.
  • Real-time updates: Establish procedures for keeping the knowledge base up-to-date. Ensure that RAG can retrieve real-time data and adapt to changes in external information sources.
  • Scalability: Assess the scalability of your RAG implementation to handle a growing volume of user queries and data sources. Plan for efficient resource allocation and distributed processing if necessary.
  • Security and privacy: Incorporate robust security measures to safeguard sensitive data and user information. Ensure that RAG complies with relevant privacy regulations.
  • Response generation: Define how RAG generates responses, including strategies for content summarization, citation generation, and context enrichment. Optimize response generation for clarity and relevance.
  • User experience: Prioritize user experience by designing an intuitive interface for interacting with RAG. Consider user feedback and iterate on the interface for usability improvements.
  • Monitoring and evaluation: Set up monitoring tools to track the performance of RAG, including response accuracy, query success rates, and system reliability. Continuously evaluate and refine your implementation.
  • Cost management: Estimate and manage the operational costs associated with RAG implementation, including data storage, retrieval, and model inference. Optimize cost-efficiency where possible.
  • Legal and ethical considerations: Ensure compliance with legal and ethical guidelines related to data usage, copyright, and responsible AI. Develop clear and effective strategies for RAG responses that deal with sensitive or controversial subjects.
  • Documentation and training: Provide comprehensive documentation and training for users and administrators to maximize the benefits of RAG and troubleshoot any issues effectively.
  • Feedback loop: Establish a feedback loop for users to report inaccuracies and provide feedback on RAG responses. Use this feedback to improve the system continually.
  • Use case specifics: Tailor your RAG implementation to the specific use cases and industries it serves. Different applications may require unique configurations and considerations.

By carefully addressing these key considerations, you can implement RAG effectively to enhance information retrieval and generation in your domain or application.

Applications of RAG

Healthcare diagnosis and treatment planning

  • Requirement: Healthcare professionals often need to access the latest medical research and patient records to make accurate diagnoses and treatment plans.
  • Solution: RAG models have been employed to retrieve up-to-date medical literature, patient histories, and treatment guidelines from vast databases. These models assist doctors in making well-informed decisions, leading to improved patient care.

Legal research and document review

  • Requirement: Legal experts require extensive legal documents and precedents to build strong cases or provide legal advice.
  • Solution: RAG systems are used to retrieve relevant case law, statutes and legal articles quickly. Lawyers and paralegals can access a comprehensive database of legal knowledge, saving time and ensuring the accuracy of their arguments.

Customer support and chatbots

  • Requirement: Customer support teams aim to provide accurate and timely responses to customer queries.
  • Solution: RAG-powered chatbots are integrated into customer support systems. These chatbots can fetch the latest product information, troubleshoot common issues, and offer personalized solutions by accessing real-time data from knowledge bases.

Financial decision making

  • Requirement: Financial analysts and investors rely on the most recent market data and economic trends for informed decisions.
  • Solution: RAG models retrieve live financial data, news articles, and economic reports. This enables investors to make data-driven investment choices and financial analysts to generate market insights quickly.

Academic research assistance

  • Requirement: Researchers and students need access to the latest academic papers and research findings.
  • Solution: RAG-based academic search engines retrieve and summarize research papers, helping researchers identify relevant studies more efficiently. Students can find authoritative sources for their coursework.

Content creation and journalism

  • Requirement: Journalists and content creators require access to recent news articles and background information for their stories.
  • Solution: RAG models assist in retrieving news updates and historical context, enhancing the quality and depth of news reporting and content creation.

E-commerce product recommendations

  • Requirement: E-commerce platforms aim to provide personalized product recommendations to users.
  • Solution: RAG models help in retrieving user-specific data and product information to generate tailored recommendations, leading to increased customer satisfaction and sales.

ZBrain: An innovative RAG-based platform

ZBrain is a RAG-based platform that efficiently combines retrieval and generation techniques to create intelligent AI applications. A standout feature of ZBrain is its ability to integrate private and real-time data into its extensive knowledge base, ensuring that the AI applications built on it are always up-to-date and contextually aware, making conversations feel more natural and efficient. It also prioritizes data security, maintaining high levels of privacy and protection.

ZBrain enables its AI applications to remember past interactions through a memory component. This is important because it helps the apps understand context during conversations, making them feel more natural. These elements make ZBrain an effective and advanced AI technology platform for businesses. The platform makes the interface highly user-friendly with ZBrain Flow. It offers customization through fine-tuning, ensures contextual understanding in conversations and maintains high levels of data security. All of these elements together make ZBrain an effective platform for businesses looking to leverage advanced RAG-based services.

Final thoughts

RAG bridges the gap between what language models know and the vast ocean of real-time knowledge available on the Internet. It empowers Large Language Models (LLMs) to transcend their inherent limitations and deliver responses grounded in the latest, most relevant information. The need for RAG becomes increasingly evident as we witness the occasional shortcomings of LLMs in providing accurate and up-to-date answers. By integrating RAG into AI systems, we unlock a world of possibilities, enabling them to retrieve, synthesize, and present information like never before.

As we continue to advance in the realm of AI, RAG serves as a reminder that our journey is not solely about building more powerful models; it’s about creating AI systems that truly understand and serve the needs of humanity. Retrieval Augmented Generation exemplifies this mission, and its impact will undoubtedly continue reverberating across industries, research, and society.

LeewayHertz’s AI experts will help you explore the limitless possibilities of RAG. Reach out to our AI consulting team now to discuss RAG’s potential use cases for your business.

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Author’s Bio


Akash Takyar

Akash Takyar LinkedIn
CEO LeewayHertz
Akash Takyar is the founder and CEO of LeewayHertz. With a proven track record of conceptualizing and architecting 100+ user-centric and scalable solutions for startups and enterprises, he brings a deep understanding of both technical and user experience aspects.
Akash's ability to build enterprise-grade technology solutions has garnered the trust of over 30 Fortune 500 companies, including Siemens, 3M, P&G, and Hershey's. Akash is an early adopter of new technology, a passionate technology enthusiast, and an investor in AI and IoT startups.

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