LLM (large language model)
An LLM is an AI model trained on vast amounts of text that understands and generates language; ChatGPT is the best-known application.
Explained simply
During training a language model has seen billions of sentences and learned which word is likely to come next. From this seemingly simple principle emerges the ability to answer questions, translate, summarise and write code.
The large models come from a handful of providers and cost hundreds of millions of dollars in computing to train. Companies build their applications on top, similar to apps on an operating system.
Limits: LLMs can produce convincing-sounding false statements ("hallucinations") and know nothing that happened after their training unless given access to current sources.
From the familiar world
An extremely well-read assistant who has read every book in the library but cannot look up a single one. He answers from memory: usually right, occasionally confident and wrong.
An example
An asset manager uses a language model to summarise the relevant passages on a topic from hundreds of pages of quarterly reports. Verification remains with the analyst.
Why it matters
LLMs are the reason for the AI investment boom since 2023 and for the demand for chips and data centres. Understanding that a model computes probabilities and knows no truth allows a realistic view of opportunities and limits.
To pass on
„A language model is an assistant who has read everything and answers from memory. Usually brilliant, sometimes confidently wrong.“
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