Large Language Model (LLM)
A large language model (LLM) is an AI model trained on very large amounts of text to understand and generate language. It predicts likely continuations of text and can follow instructions, summarize, translate, reason through problems, and write code.
AI
Explanation
LLMs are the foundation of most current generative AI applications, including chat assistants and AI agents. They are trained in two broad stages: pre-training on large text collections, and further training to follow instructions and behave helpfully and safely.
An LLM does not look up facts the way a database does. Its answers are generated from patterns learned during training and from the information provided in the prompt. This makes LLMs flexible but also means they can produce incorrect statements – so-called hallucinations – if they lack reliable context.
Why It Matters
In SAP finance, LLMs can interpret requirements, explain configuration, draft documentation, generate test scenarios, and analyze error messages. Their reliability improves significantly when they are connected to the right data and tools – for example through retrieval-augmented generation or the Model Context Protocol – and when results are reviewed by specialists.
Related Terms
Generative AI · AI Agent · Hallucination · Retrieval-Augmented Generation · Prompt Engineering
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