Module 2 of 6 · 25 minutes

How AI gets things wrong

AI errors aren't random. They fall into recognisable types, and knowing them tells you exactly where to look.

Learning objectives

  • Classify common types of AI error
  • Explain why each type occurs
  • Spot red flags in AI-generated text
  • Learn from real-world verification failures

2.1 A taxonomy of AI errors

Knowing the common types of error tells you where to look.

Error typeWhat it looks likeWhere to look
FabricationInvented facts, statistics, quotes, people, case law or referencesEvery specific claim with a number, name, date or citation
MisattributionA real source cited for something it doesn't sayCitations — open and read them
Contextual errorsIgnoring, misreading or mixing up the documents you providedCompare summaries against the source
Outdated informationOld prices, laws, leaders or product detailsAnything time-sensitive
Reasoning errorsLogical leaps, wrong maths, conclusions that don't followCalculations and "therefore" statements
OmissionsLeaving out important caveats, risks or counter-evidenceAsk: what would an expert add?
Overgeneralisation"Always", "never", "all experts agree"Absolute or sweeping claims
InconsistencyContradicting itself within or across answersCompare sections; ask again differently
SycophancyAgreeing with your mistaken premise or flattering weak workAnswers that conveniently confirm your view
BiasStereotypes, one-sided perspectives, unequal treatmentContent about people and groups (Module 4)

IBM groups hallucinations into factual, contextual and consistency types — a helpful shorthand for the first rows above.

Remote work boosts productivity by 47.3%according to a 2024 Harbourne University study(Ellis et al., J. Work Econ., 2024).As the CEO of Acme said: "Offices arefinished."All experts agreeit is the future of work.Precise number, no source?Does this study exist? Does itsay this? (citations: Module 3)Quote from a named person —verify or removeAbsolute claim — overgeneralised
An invented AI answer, annotated. Errors hide in specifics: numbers, citations, quotes from real people and sweeping claims. That's where to look first.

2.2 Why these errors happen

As the How AI Works course explains, LLMs generate the most plausible continuation, not verified facts. OpenAI's 2025 research argues that training and evaluation often reward confident guessing over admitting uncertainty. Models also have a training cut-off, and post-training can reward agreeable answers.

2.3 Red flags in the text itself

  • Very specific numbers with no source ("73.4% of UK SMEs…")
  • References you can't immediately find, or that look slightly wrong (author, year or journal mismatches)
  • Quotes attributed to named people
  • Confident claims about recent events
  • Neat, symmetrical lists that look too tidy for a messy topic
  • An answer that perfectly matches the assumption in your question
Case study: invented case law

Lawyers in the US, the UK and elsewhere have submitted court documents citing cases generated by AI that did not exist. In 2025 the High Court of England and Wales warned that lawyers who cite fake AI-generated cases could face serious consequences, and that freely available generative AI tools are not capable of reliable legal research. The tools weren't "lying" — they generated plausible-looking citations. The failure was the missing verification step.

Try it: error hunt

Ask an AI tool for "five statistics about AI adoption in UK small businesses, with sources". For each statistic, find the original source. How many exist, are current and say exactly what was claimed?

Key takeaways

  • Fabrication and misattribution are the most dangerous errors — check specifics and citations.
  • Contextual errors misread the material you supplied.
  • Watch for outdated facts, reasoning slips, omissions and absolute claims.
  • Answers that echo your assumption may be sycophantic.