The simple version
AI is a non-deterministic (randomised) predictive engine - think autocorrect, but trained on almost everything ever written. It predicts the most helpful next word, sentence, or idea based on your input and its training data. It doesn't "think" or "understand" - it pattern-matches at enormous scale.
Why it can get things wrong
AI is trained to be helpful and to always produce an answer. When it doesn't know something for certain, it may confidently make something up. This is called hallucination - it's not lying, it's over-eager. Always verify important facts from primary sources.
Data frozen in time
AI models have a training cutoff date - they don't automatically know what happened recently. Many can use tools like web search or database queries to fetch up-to-date information when needed, but check whether your tool supports this.
Key terms to know