---
term: "Confabulation"
category: "AI risks and safety"
url: https://agenticopenfinance.com/glossary/confabulation
source: AgenticOpenFinance glossary
---

# Confabulation

> Confidently stated but false or erroneous output from a generative AI system, often called hallucination.

NIST's Generative AI Profile uses confabulation for the production of confidently stated but erroneous or false content, known colloquially as hallucinations or fabrications, by which users may be misled or deceived. It arises because generative models produce likely-sounding output rather than verified facts. In finance a confabulated account number, fee or legal requirement can lead directly to a wrong payment or decision, so facts that drive actions must come from verified sources, not from the model.

Related terms: [Large language model](https://agenticopenfinance.com/glossary/large-language-model.md), [Retrieval-augmented generation](https://agenticopenfinance.com/glossary/retrieval-augmented-generation.md), [Defective execution](https://agenticopenfinance.com/glossary/defective-execution.md), [Automation bias](https://agenticopenfinance.com/glossary/automation-bias.md)