Day 1 - How to Design AI Systems

Session Q&A - I'm curious how RAG has changed over time?

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2 comments

RAG has had a really interesting evolution. It started simply as a fix for relevance and accuracy—just trying to get the LLM to talk about the right things.

Then, the focus shifted to hallucinations. It became about providing a "source of truth" and verifiable references so we could actually trust the output. Soon after, it became the standard for enterprise data privacy, allowing companies to use proprietary data without feeding it into a public model's training set (running locally not through commercial APIs).

Where we are now is the most exciting part: RAG isn't just a standalone pipeline anymore. It’s a specialized node within a larger Agentic system—an agent whose specific "job" is to manage an external knowledge base. It went from being the whole story to being a powerful tool in an agent's toolkit.

The Evolution of RAG (in four stages):

Stage 1: Fixing Relevance

LLMs were making stuff up. RAG said "here's the actual document, now answer." Problem solved.

Stage 2: Fixing Trust

People wanted proof. RAG started providing citations and source links so you could verify everything.

Stage 3: Fixing Privacy

Companies needed to use internal data without leaking it. RAG kept proprietary info local and never trained on it.

Stage 4: Becoming an Agent Tool

Now RAG isn't the whole system—it's one specialist in a team. The orchestrator calls it only when external knowledge is needed, while other agents handle different tasks.

Bottom line: RAG went from being the solution to being one tool in the toolbox.