AI Glossary
Clear, practical definitions of the terms that come up when European enterprises evaluate AI. Written for decision-makers, not engineers.
Terms & definitions
Retrieval-Augmented Generation (RAG)
RAG is an AI technique that retrieves relevant text from approved documents and uses it as the basis for a language-model answer, rather than generating from model memory alone.
EU AI Act
The EU AI Act is the European Union's 2024 regulation that classifies AI systems by risk and sets obligations for providers and deployers — the first comprehensive AI law in the world.
GDPR Article 28
GDPR Article 28 defines the contract between a Data Controller and a Data Processor and sets minimum requirements including security, confidentiality, and subprocessor transparency.
EU Data Residency
EU data residency means that personal and business data is stored and processed only within the European Union, protecting it from extraterritorial access under non-EU laws such as the US CLOUD Act.
AI Hallucination
An AI hallucination is a response generated by a language model that sounds plausible but is factually wrong, unsupported, or fabricated.
Source Attribution
Source attribution is the practice of returning, with every AI answer, a reference to the exact source passage used to construct that answer so the user can verify it.
Enterprise AI
Enterprise AI refers to AI systems designed for organizational use, with requirements around security, compliance, integration, access control, and auditability that consumer AI products do not meet.