In One Sentence
RAG (Retrieval-Augmented Generation) is a setup where, when generating an answer, an LLM searches external documents or databases and incorporates those results into the answer.
What does this look like in practice?
For example, when ChatGPT is asked, "What are the latest trends in the AI market?":
[Traditional LLM]:
Only knows up to its training-data cutoff (e.g. one year ago),
so it answers with stale information or "I don't know"
[AI search using RAG]:
1. Searches the web in real time (retrieval)
2. Obtains related information
3. Generates the answer based on it (generation)
→ Returns an answer informed by the latest information