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RAG vs. LLM fine-tuning: Which is right for you?
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RAG vs. LLM fine-tuning: Which is right for you?

By Jacob Andra / Published October 16, 2024 
Last Updated: October 16, 2024

Executive summary:

There are two competing paths for turning generalist large language models into specialists: fine-tuning and retrieval-augmented generation (RAG).

LLM fine-tuning involves retraining an existing AI model on your domain-specific data. This approach offers deep expertise but requires significant computational resources and ongoing maintenance.

RAG combines a general-purpose AI with a customizable knowledge base. It's more flexible, easier to update, and provides transparent sourcing of information. RAG excels at incorporating the most current data without extensive retraining.

Both methods have their strengths:

  • Fine-tuning provides superior performance in narrow domains
  • RAG offers greater adaptability and easier maintenance

For optimal results, you can combine RAG with fine-tuning. A fine-tuned model can serve as the foundation for a RAG system, providing both deep expertise and up-to-date information access. For the ultimate in configurability, flexibility, agility, and explainability, look into a cognitive hive AI (CHAI) architecture. CHAI takes a modular building-block approach where you can fine-tune individual components, give individual components access to specialized resources (RAG), or both.

Talbot West specializes in guiding enterprises through AI tool selection, implementation, and governance. Our expertise helps you leverage the right AI approach (CHAI, fine-tuning a standard LLM, RAG) for your unique business needs.

Schedule a free consultation with Talbot West today.

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Retrieval-augmented generation (RAG) and fine-tuning are two approaches for transforming a general-purpose large language model (LLM) into a domain specialist.

Main takeaways
RAG enables access to custom knowledge sources.
Fine-tuning modifies the core model architecture.
RAG implementations are easier and faster.
Fine-tuning offers greater control over model behavior.
RAG and fine-tuning can be combined for the ultimate customization.

What is retrieval-augmented generation?

Retrieval-augmented generation combines the power of generative AI with the precision of targeted data retrieval. It enhances AI's ability to give accurate, context-specific responses.

A RAG system has two main components:

  1. A knowledge base of info specific to your organization.
  2. An LLM trained to reference your data when queried; the LLM also has broad-based knowledge and can be given access to external resources.

Let's take a look at how it works:

  1. You ask a question.
  2. The system searches a knowledge base for relevant info.
  3. It combines this retrieved data with its built-in knowledge.
  4. You get a response that's both intelligent and informed.

RAG is useful for companies that want an AI expert who knows everything about their business—without the HR overhead.

If you’d like help implementing RAG in your organization, let’s talk.

Work with Talbot West

What is LLM fine-tuning?

LLM fine-tuning transforms a general-purpose AI model into a specialized expert for specific tasks or domains. It's like taking a highly educated generalist and giving them focused training to become a subject matter expert.

Here's a deeper look at how fine-tuning works:

  1. Base model selection: Choose a pre-trained model (such as GPT-4 or BERT) that already has a broad understanding.
  2. Data preparation: Curate a high-quality, task-specific dataset. This could be anything from medical texts for a healthcare AI to legal documents for a law-focused model.
  3. Hyperparameter adjustment: Fine-tune parameters such as learning rate, batch size, and epochs to balance learning efficiency and model performance.
  4. Training process: The model is trained on your specialized dataset. This process involves feeding data batches to the model, calculating the loss (how far off the model's predictions are), and updating the model's weights using backpropagation.
  5. Evaluation and iteration: The fine-tuned model is tested on a separate validation dataset. Based on performance metrics (such as accuracy, precision, and recall), the process may be repeated with adjusted parameters.
  6. Deployment and monitoring: Once optimized, the model is deployed and continuously monitored in real-world use.

With fine-tuning, you need to be careful not to overfit the model. Overfitting occurs when you overtrain the model, with the result that it can no longer generalize effectively to information outside its narrow scope.

If you’d like help fine-tuning your LLM, get in touch, and let’s have a free consultation.

Work with Talbot West

What is the difference between LLM fine-tuning and RAG?

LLM fine-tuning and RAG offer distinct approaches to driving specialization in AI. Let's take a look at how they compare:

LLM fine-tuningRetrieval-augmented generation

Specialization

Deep specialization in a specific domain or task

Broader knowledge scope, less domain-specific

Flexibility

Less flexible; specialization is fixed after training

Highly flexible; can adapt to new topics by updating the knowledge base

Information updates

Requires retraining to incorporate new information

Can be updated by modifying the knowledge base without retraining

Resource requirements

Computationally intensive; may require significant GPU resources

No additional compute required

Maintenance

More challenging; requires periodic retraining

Easier; primarily involves updates to the knowledge base

Up-to-date information

Limited to information available during training

Accesses the most current data in the knowledge base

Transparency

Less transparent; knowledge embedded in model parameters

More transparent; can cite sources of retrieved information

Performance in specialized tasks

Typically outperforms general LLMs in the specialized domain

Performance depends on the quality and relevance of retrieved information

Breadth of knowledge

Limited to the scope of fine-tuning data

Only limited by the knowledge base content

Integration of new domains

Requires additional fine-tuning or training new models

Can add new domains by expanding the knowledge base

Response generation

Generates responses based on internalized knowledge

Generates responses by combining model knowledge with retrieved information

Customization

Highly customized to the specific fine-tuning data

Customization through careful curation of the knowledge base

Scaling

Scaling to new domains may require training multiple models

Can scale to new domains by adding to the knowledge base

Combining RAG and fine-tuning

Minimalist art deco design showing a human hand adjusting sliders (fine-tuning) on one side, and a digital interface retrieving data points (RAG) on the other side. Data flows between the two, symbolizing human-AI collaboration. Futuristic, stylized design with art deco elements--- Combining RAG and fine-tuning by Talbot West

RAG and fine-tuning are complementary approaches. When combined they create a powerful, specialized AI system. Here are some potential approaches:

  • Domain expertise + current information: Fine-tune a model for deep domain knowledge, then use RAG to supplement it with up-to-date information.
  • Enhanced retrieval and generation: Use a fine-tuned model as the base for a RAG system, improving both information retrieval and response relevance.
  • Continuous learning: Implement a two-stage process where fine-tuning creates a specialized model, and RAG keeps it updated.
  • Targeted augmentation: Fine-tune for core knowledge and use RAG selectively for rapidly changing information or specific subtopics.

What is cognitive hive AI?

Cognitive hive AI (CHAI) is a modular approach to AI implementation. Rather than a single, monolithic LLM deployed in your organization, you can configure multiple smaller LLMs to work in conjunction. You can even deploy other types of AI or knowledge management as modules: knowledge graphs, specialized neural networks, large quantitative modules, and much more.

Essentially, CHAI is infinitely configurable and agile. Individual modules can be connected to knowledge sources (RAG), or fine-tuned to specific parameters, without needing to take the same approach to the entire system.

Read more about CHAI use cases and implementation feasibility in our article titled “What is cognitive hive AI?

Reach out to Talbot West

Talbot West is here to help you assess the best AI solution for your needs. We’ll guide you through tool selection, implementation, governance, and any other AI issue you’re facing.

Schedule a free consultation, and check out our services page for the full scope of our offerings.

RAG vs. LLM fine-tuning FAQ

Retrieval augmented generation was first introduced by researchers at Facebook AI (now Meta AI). They detailed the concept in a 2020 paper, which outlined how combining retrieval mechanisms with generative models could enhance information accuracy and relevance.

Fine-tuning LLMs can be a resource-intensive process. The costs fluctuate based on factors such as the size of the model, the complexity of the dataset, and the duration of the fine-tuning process. Although it's generally more economical than training a model from scratch, it still requires substantial resources. For organizations working with limited budgets, there are more cost-effective alternatives available, such as parameter-efficient fine-tuning techniques.

ChatGPT does not incorporate RAG in its base incarnation. You can create a mini RAG-like architecture by building a custom GPT and adding your own documentation to it.

The data requirements for LLM fine-tuning are contingent on the complexity of the task and the desired level of performance. As a general guideline, a dataset ranging from several hundred to a few thousand high-quality, diverse samples is often sufficient. While increasing the sample size can lead to improved results, there's usually a point of diminishing returns beyond which additional data provides minimal benefits.

Fine-tuning is a specific application of transfer learning. While transfer learning broadly encompasses the use of knowledge from one domain to improve performance in another, fine-tuning specifically refers to the process of adapting a pre-trained model for particular tasks.

Factors influencing the timeline include the size of the model, the volume of the dataset, and the computational resources at hand. For smaller models, the process might take just a few hours, while larger models could require several days or even weeks.

The future of RAG is promising, with ongoing research focused on enhancing data retrieval efficiency and expanding integration with diverse data sources. As the technology progresses, RAG is expected to significantly improve AI's capability to deliver real-time, contextually accurate information. This advancement will transform how businesses and applications interact with and utilize data.

While both RAG and semantic search aim to improve information retrieval, they differ in their outputs. RAG retrieves relevant data and uses it to generate new, contextually enriched content. Semantic search, however, focuses on understanding the meaning behind queries to provide the most relevant existing documents or results, without creating new content.

Resources

  • Ovadia, O., Geva, M., Goldberg, Y., & Berant, J. (2024). Fine-Tuning or Retrieval? Comparing Knowledge Injection in LLMs.Retrieved from https://arxiv.org/abs/2312.05934
  • Shu Wei Ting, D. (n.d.). Development and Testing of Retrieval Augmented Generation in Large Language Models. Retrieved from https://arxiv.org/pdf/2402.01733
  • Lewis, P., Perez, E., Piktus, A., Petroni, F., Karpukhin, V., Goyal, N., Küttler, H., Lewis, M., Yih, W., Rocktäschel, T., Riedel, S., & Kiela, D. (2020). Retrieval-Augmented Generation for Knowledge-Intensive NLP Tasks. Retrieved from https://arxiv.org/abs/2005.11401

About the author

Jacob Andra is the founder of Talbot West and a co-founder of The Institute for Cognitive Hive AI, a not-for-profit organization dedicated to promoting Cognitive Hive AI (CHAI) as a superior architecture to monolithic AI models. Jacob serves on the board of 47G, a Utah-based public-private aerospace and defense consortium. He spends his time pushing the limits of what AI can accomplish, especially in high-stakes use cases. Jacob also writes and publishes extensively on the intersection of AI, enterprise, economics, and policy, covering topics such as explainability, responsible AI, gray zone warfare, and more.
Jacob Andra

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