What is a large language model (LLM)?
An AI model trained on vast amounts of text that can understand and generate natural language; the foundation of AI chat products.
In detail
A large language model learns patterns between words from huge amounts of text; at its core, it “predicts the next word based on what came before”. At sufficient scale, it becomes capable of summarizing, translating, writing and reasoning. Its answers come from what it learned during training — it does not look things up on its own — so it knows nothing about the latest information or a company's internal information.
For example
Give it a 20-page supplier contract and within seconds it can pull out key points such as payment terms and liability for breach; give it a batch of customer complaint emails and it can sort them automatically by issue type.
How companies use it
It is well suited to high-volume text work: drafting emails and reports, writing up meeting notes, summarizing customer feedback and answering questions about internal policies. When a company's own data is involved, it is usually combined with retrieval-augmented generation (RAG) or connected to business systems.
Common misconceptions
Treating the model's answers as fact. Models sometimes “get things wrong with complete confidence” — a phenomenon often called hallucination. Always check the source of key figures and conclusions.
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