Term · AI
Generative AI
Generative AI creates something new: a text, an image or a summary. You give the instruction, the model makes a proposal.
In short
Generative AI is a form of artificial intelligence that creates new content, such as text, images, sound or code. You give an instruction (a prompt) and the model makes a proposal based on patterns it has learned. You check that proposal yourself.
What is generative AI?
Generative AI is AI that creates new content: text, images, sound or code. You give an instruction and the system makes something that did not exist before.
That is different from many older forms of AI. Those mainly recognise or sort, such as a spam filter that puts email into a folder. Generative AI writes or draws by itself. The instruction you give is called a prompt.
How does generative AI work?
At its heart is an AI model. That model has been trained on a great many examples and has learned patterns from them. For text, that is a language model (LLM). Services such as ChatGPT, Microsoft Copilot and Claude work this way.
The model does not look up what is true. It creates what fits the patterns it knows. As a result, it can make a mistake that sounds very convincing. That is called a hallucination.
Example in an SME
A made-up example
An installation company receives long work reports from engineers every week. An employee has the company's business AI tool make a short summary of each report for the customer. He reads the text through, adjusts it and only then sends it.
Other examples are a first version of a quote text, a draft reply to an email or an image for a presentation. How that can work for quotes, you can read in Making quotes with AI.
What should you watch for?
- Checking. See the result as a draft. A person reads it through before it goes to a customer.
- Data. Do not put personal data or confidential information into a free AI service. What you enter may be stored by the provider.
- Agreements. Agree with your team which tools are allowed and for what. That belongs in an AI policy.
- Openness. Since 2 August 2026, rules from the EU AI Act apply to make clear when something has been made with AI, for example with deepfakes.
Do you want to know where generative AI helps in your business, and where it does not? I work that out with you in a business analysis. Read more about AI in your business.
Frequently asked questions
Is ChatGPT generative AI?
Yes. ChatGPT creates new text based on your instruction. It runs on language models from the company OpenAI.
Is what generative AI creates reliable?
Not automatically. The model creates what sounds likely, not what has been verified as true. So check facts, names and amounts yourself.
May I use generative AI in my business?
Yes, but make agreements. The Dutch Data Protection Authority (Autoriteit Persoonsgegevens) warns about data breaches when employees put personal data into an AI chatbot. And the EU AI Act requires you to take measures for your team's AI literacy.
Sources: the Dutch Data Protection Authority (Autoriteit Persoonsgegevens): Guidance on generative AI and the GDPR (in Dutch), AP: using an AI chatbot can lead to data breaches (in Dutch) and AP: AI transparency requirements apply from 2 August (in Dutch). Consulted on 7 October 2026.
Written by Bart van Engelenhoven Founder of Uniekaiconsultancy in Ede, the Netherlands. Bart analyses how SMEs work and builds software, integrations and AI applications himself. Last updated: 7 October 2026
Read more
Term
LLM (large language model)
An LLM (large language model) is the language model behind services like ChatGPT. It keeps predicting the next word. What that means for your business.
Read moreTerm
Prompt
A prompt is the instruction you give an AI tool. What do you put in it (task, context, form) and which data do you leave out? Explanation with an example.
Read moreTerm
AI hallucination
An AI hallucination is an answer that sounds convincing but is wrong. Why language models do this and how to check an AI answer.
Read moreNext step
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