The hallucination factor: Why metrics matter in the age of large language models (LLMs)

The hallucination problem!

Large Language Models (LLMs) have taken the world by storm. Their ability to generate human-quality text, translate languages, write different kinds of creative content, and answer your questions in an informative way is nothing short of remarkable. However, beneath this veneer of fluency lies a hidden challenge – hallucinations.

What are LLM hallucinations?

Imagine you ask an LLM, “What is the capital of France?” It confidently replies, “Madrid.” This is a classic example of an LLM hallucination. Hallucinations are factually incorrect or misleading outputs generated by the model, often woven seamlessly into a seemingly coherent response.

These hallucinations can be particularly dangerous because they can be delivered with an air of believability. Unlike a random string of nonsensical words, hallucinations are crafted based on the LLM’s vast knowledge base, making them difficult to detect for the uninitiated user.

The extent of the problem

A recent report by Gartner predicts that by 2025, 30% of customer service interactions will leverage LLMs. This rapid integration into mission-critical applications underscores the urgency of addressing LLM hallucinations.

A 2023 study by McKinsey found that 60% of businesses surveyed expressed concerns about the potential for misinformation and bias in LLM outputs. This highlights the need for robust metrics to not only identify hallucinations but also understand the root causes behind them.

Why do LLMs hallucinate?

LLMs are trained on massive datasets of text and code. While impressive in its scale, this data can be inherently imperfect, containing factual errors, biases, and inconsistencies. The LLM, lacking the ability to discern truth from falsehood, simply absorbs it all. When prompted to respond, the model may unknowingly draw upon these inaccuracies, leading to hallucinations.

Another factor is the statistical nature of LLM outputs. LLMs predict the next most likely word in a sequence, which can lead them down a path of creative embellishment, straying further from factual accuracy with each step.

The metrics maze: Measuring the unmeasurable?

Evaluating LLM performance is a complex task. Traditional metrics like BLEU score, which assess similarity between generated text and reference outputs, fail to capture the nuance of factual correctness.

New metrics are emerging to address this gap. Here’s a breakdown of some promising approaches:

Statistical scorers: These metrics, like perplexity, measure the LLM’s confidence in its predictions. Higher perplexity might indicate a higher chance of hallucination, but it’s not a foolproof indicator.

Model-based scorers: These metrics leverage pre-trained models or other LLMs to evaluate factual consistency. For instance, ChainPoll utilizes human experts to create reference responses, allowing for a more nuanced assessment of factual accuracy.

LLM-eval scorers: These innovative approaches use an LLM itself to assess the outputs of another LLM. G-Eval, for example, employs an LLM to generate evaluation steps and a form-filling paradigm to determine a score. While powerful, such methods can be susceptible to the limitations of the evaluating LLM itself.

Hybrid scorers: These metrics combine elements of statistical and model-based approaches. BERTScore and MoverScore are examples, using pre-trained models to compute semantic similarity between the LLM output and reference texts.

The road ahead: Mitigating hallucinations

There’s no silver bullet for eliminating LLM hallucinations entirely. However, a multi-pronged approach can significantly reduce their occurrence. Here are some key strategies:

Data quality: Curating high-quality training data sets that are factually accurate and diverse can significantly improve LLM performance.

Prompt engineering: Crafting clear and concise prompts that guide the LLM towards generating factual outputs is crucial.

Model fine-tuning: Fine-tuning LLMs on specific tasks and datasets can help them specialize in areas where factual accuracy is paramount.

Human-in-the-loop systems: Integrating human oversight into LLM workflows can ensure the final output is vetted for accuracy before being presented to the user.

Beyond hallucinations: A broader look at LLM trustworthiness

While hallucinations are a major concern, they represent just one facet of LLM trustworthiness. Here are some additional considerations:

Bias: If LLMs are trained on data reflecting societal prejudices, they may unknowingly inherit those biases and generate outputs reinforcing them. To prevent this, we need to ensure training data is balanced and accurately represents the world we live in.

Explainability: Understanding how LLMs arrive at their outputs is essential for building trust. Research into explainable AI (XAI) techniques is ongoing to address this challenge.

Transparency: Open communication about the limitations and capabilities of LLMs is essential for managing user expectations and fostering trust.

The future of LLMs: A collaborative dance

LLMs hold immense potential to revolutionize various industries. However, addressing the challenge of hallucinations and building trust in these models is paramount. This requires a collaborative effort between LLM developers, data scientists, ethicists, and policymakers.

Here’s a glimpse into what the future might hold:

Standardized benchmarks: The development of standardized benchmarks for evaluating LLM factuality and trustworthiness will be crucial for ensuring consistent and reliable performance.

Regulatory frameworks: As LLM applications become more widespread, regulatory frameworks may emerge to establish guidelines for data quality, bias mitigation, and explainability.

Human-AI collaboration: The future likely lies in a collaborative approach where humans and LLMs work together, leveraging each other’s strengths to achieve optimal outcomes. Humans can provide guidance and oversight, while LLMs can automate tasks and provide insights at scale.


LLMs are powerful tools with the potential to transform our world. By acknowledging and addressing the challenge of hallucinations and other trust-related concerns, we can pave the way for responsible development and deployment of these transformative technologies. In this collaborative dance between humans and AI, LLMs can become powerful partners, augmenting our intelligence and creativity while ensuring factual accuracy and ethical considerations are at the forefront.

Author: Abishek Balakumar
Abishek Balakumar is a Tech Marketing Visionary and a Strategic Marketing Consultant specializing in Banking and Financial Services. As a seasoned Partner Marketer, he leverages his expertise to host engaging podcasts and webinars. With a keen focus on APAC and US event management, he is a specialist and enabler in orchestrating successful business events. Abishek is also a gifted Business Storyteller and an accomplished Author, holding a master's degree in Marketing and Data & Analytics.