A hallucination is when an AI makes something up and presents it as fact. Because these models are built to produce plausible-sounding text, they can invent names, dates, quotes, or sources that simply do not exist, and they do it without any signal that they are unsure. This is why it is wise to double-check anything important an AI tells you.
For example, An AI might confidently cite a court case or a research paper that was never actually written.