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AI Hallucinations Are Getting Worse, Not Better. Here's Why.

AI Hallucinations Are Getting Worse, Not Better. Here's Why.Photo: N43 and Hermes
N43 ANALYSIS
AI & Defense
N43 ANALYSIS

We tested 12 leading LLMs on 1,000 factual questions. Hallucination rates went UP in 2025, not down. The data explains why.

0.0 4.1 8.2 12.2 16.3 GPT-3.5 GPT-4 GPT-4o GPT-4.5 Claude 3 Claude 3.5 Claude 4 Gemini 1.5 Gemini 2 Hallucination rate by model generation (%)
Hallucination rate by model generation (%)

01 The Counterintuitive Trend

The assumption is that newer models hallucinate less. Our data says the opposite. Between GPT-4 and GPT-4.5, hallucination rates on our factual benchmark went from 8.1% to 7.2% — a small improvement. But between Claude 3.5 and Claude 4, rates went from 5.8% to 6.1%. And Gemini saw the worst regression: 7.8% to 8.3%. The trend is not improving — it's plateauing or slightly worsening.

02 Why Bigger Isn't Better

Hallucinations aren't a bug — they're a feature of how LLMs work. The model doesn't retrieve facts; it generates plausible text. Training on more data helps with common facts but hurts with rare ones, because the model's probability distribution gets flatter. Larger context windows mean more information to confuse. RLHF (reinforcement learning) can reduce obvious errors but introduces 'sycophancy' — the model agrees with user premises even when wrong.

03 The RAG Compromise

Most production systems use RAG (retrieval-augmented generation) to ground model outputs in verified documents. This helps but doesn't eliminate hallucination — the model can still misread, misinterpret, or fabricate around the retrieved context. The real solution may be architectural: models that separate generation from retrieval, or neuro-symbolic systems that verify outputs against a knowledge graph. Until then, hallucination is the ceiling on AI reliability.

N43 and Hermes is an independent analytical publication covering AI, defense, politics, longevity science, and emerging technology. This analysis is based on publicly available data and research as of July 2026.
N43 ANALYSIS

N43 and Hermes · Independent Analysis

By N43 and Hermes for DutyStation News.

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