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RAG Explained | All about RAG - Retrieval Augmented Generation

Transcribed Jun 14, 2026 Watch on YouTube ↗
Intermediate 7 min read For: Aspiring AI engineers and developers looking to understand RAG concepts and implementation.
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AI Summary

This video explains Retrieval Augmented Generation (RAG), a common skill in Gen AI job postings. It covers what RAG is, its types (vector, vectorless, hybrid, graph, SQL, and reasoning-based), and demonstrates a customer care chatbot project. The video also provides resources and interview questions.

[00:42]
RAG Explained with Analogy

RAG is like a smart student (LLM) with a book (external knowledge) for an open-book exam. The LLM uses its language skills to find answers in the provided document.

[02:01]
Two-Step RAG Process

Step 1: Indexing – chunk documents, convert to vector embeddings, store in vector DB. Step 2: Retrieval – embed user query, find relevant chunks via semantic search, and feed them to LLM with the question.

[05:45]
Benefits of RAG

RAG provides accurate answers and reduces hallucinations by grounding responses in source knowledge. It is cost-effective because only relevant chunks are sent to the LLM, reducing token usage.

[06:22]
Hands-On Project: Telecom Chatbot

A customer care assistant RAG project using LangChain, Chroma DB, and Hugging Face embeddings. It ingests PDF, CSV (FAQs), and SQLite database (tickets) to answer user queries.

[08:18]
RAG Categories: Vector RAG

Naive RAG (vector) retrieves top-K chunks from vector DB. Hybrid RAG combines vector and keyword search for better results in production.

[09:18]
RAG Categories: Vectorless RAG

Keyword RAG (BM25, TF-IDF) works for exact keyword matches. Graph RAG uses knowledge graphs for multi-hop reasoning. SQL RAG converts natural language to SQL queries. Reasoning-based RAG (Page Index) uses document structure and LLM reasoning without vectors.

RAG is a powerful technique for grounding LLMs in external knowledge, improving accuracy and cost-efficiency. Understanding different RAG types helps choose the right approach for specific use cases.

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Mentioned in this Video

Tutorial Checklist

1 06:22 Download the project code from the video description.
2 07:00 Ingest data sources (PDF, CSV, SQLite) into Chroma DB using LangChain.
3 07:17 Set chunk size to 600 and overlap to 100 with recursive character text splitter.
4 07:24 Use Hugging Face embedding model for vector embeddings.
5 07:31 Configure retriever to fetch relevant chunks from FAQ, tickets, or guides.
6 07:37 Use Qwen LLM from Chat Grok for answer generation.
7 07:41 Run the project on your computer to test the chatbot.

Study Flashcards (9)

What does RAG stand for?

easy Click to reveal answer

Retrieval Augmented Generation

00:04

What are the two main steps in the RAG process?

easy Click to reveal answer

Indexing and Retrieval

02:01

What is an embedding?

medium Click to reveal answer

A process of converting text into a vector that represents its meaning.

03:53

Name two vector databases mentioned in the video.

easy Click to reveal answer

Milvus, Qdrant, Chroma DB (any two)

04:44

What is the benefit of using RAG for cost?

medium Click to reveal answer

It reduces token usage by sending only relevant chunks to the LLM, saving API costs.

06:05

What is hybrid RAG?

medium Click to reveal answer

Combining vector search and keyword search in parallel and merging results.

09:28

What is SQL RAG?

hard Click to reveal answer

Converting natural language questions to SQL queries using an LLM, executing them, and generating answers.

11:08

What is the key difference between vector RAG and vectorless RAG?

medium Click to reveal answer

Vector RAG uses embeddings and vector databases; vectorless RAG uses keyword matching or reasoning without vectors.

08:18

What is the Page Index method?

hard Click to reveal answer

A reasoning-based RAG that generates a tree structure from documents and uses LLM reasoning to find relevant chunks without vectors.

11:47

💡 Key Takeaways

💡

RAG Analogy

Provides an intuitive understanding of RAG using a student and open-book exam analogy.

00:42
🔧

Two-Step RAG Process

Clearly explains the core mechanism of indexing and retrieval.

02:01
📊

Benefits of RAG

Highlights accuracy and cost-effectiveness as key advantages.

05:45
💡

RAG Categories Overview

Provides a comprehensive taxonomy of RAG types, including vector, vectorless, hybrid, graph, SQL, and reasoning-based.

08:18
🔧

Page Index Method

Introduces a novel reasoning-based RAG approach without vectors.

11:47

✂️ Creator Tools: Viral Hooks

AI-generated clip ideas for Shorts based on the transcript

What is RAG? The skill every AI engineer needs

40s

Opens with a high-demand skill mention and a relatable analogy, hooking viewers interested in AI careers.

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RAG explained with a simple analogy

60s

Uses a memorable student-exam analogy to explain a complex concept, making it accessible and shareable.

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Why naive RAG isn't dead: vector vs keyword search

60s

Addresses a trending debate in AI, offering clear pros and cons that spark discussion.

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5 types of RAG you need to know

60s

Lists multiple RAG variants in a quick, informative format that appeals to learners and professionals.

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Graph RAG vs SQL RAG: which one wins?

60s

Compares two advanced RAG methods, highlighting practical use cases that resonate with data engineers.

▶ Play Clip

[00:00] In almost all Gen AI engineer job

[00:02] postings, you will find one common

[00:04] skill, retrieval augmented generation,

[00:06] also known as rag. In my company at

[00:09] Lake, when we build AI projects for our

[00:11] clients, more than 40% of these projects

[00:14] have rag component in it. So, what

[00:16] exactly is rag? What are different

[00:18] types? Is naive rag dead due to

[00:20] vectorless rag? We are going to cover

[00:22] all these rag basics in a very simple

[00:25] and intuitive language. We will not just

[00:27] talk theory. I will show you a rag

[00:30] project which is a customer care chatbot

[00:32] in telecom domain. In the end, I will

[00:35] share some useful resources including

[00:38] rag interview questions. All right,

[00:40] let's get started. Let's understand rag

[00:42] using a simple example. When you ask

[00:44] ChatGPT a policy question for some

[00:47] private company, it won't be able to

[00:49] answer it because ChatGPT is trained on

[00:53] general internet knowledge. It doesn't

[00:55] know the HR policy details of any

[00:58] private company. But, if you give HR

[01:02] policy document to this LLM, which acts

[01:04] like a brain, it should be able to read

[01:07] a relevant section and provide you with

[01:09] the answer. This is similar to having a

[01:13] very smart student Mira, who is a

[01:15] computer science student, and you are

[01:17] asking her to appear in a microbiology

[01:20] exam, which is an open book exam. Now,

[01:22] Mira is generally good in terms of

[01:24] reading writing comprehension

[01:26] understanding, etc., but she doesn't

[01:28] know anything about microbiology. But,

[01:30] in this exam, she has been given a book

[01:33] on microbiology from which they are

[01:35] going to ask the questions. Now, Mira

[01:37] can use her reading, writing,

[01:40] comprehension skills to uh look at the

[01:42] book and she can write answers in the

[01:45] exam. So, here Mira's brain is like LLM,

[01:48] which has a good understanding of

[01:49] language, it has reasoning capabilities,

[01:52] and the book is like an HR policy

[01:54] document. It is an external knowledge

[01:56] where LLM can look into it and pull the

[01:59] answers. Let's now understand the

[02:01] two-step process of how rag works

[02:04] underneath. So, here I have HR policy

[02:06] document from Atliq, which will have a

[02:08] section on retirement benefits, okay?

[02:12] So, now if I go to ChatGPT, and if I

[02:14] copy this particular section, okay, and

[02:17] I ask my question related to

[02:20] contribution to employees retirement

[02:22] fund, in that case, ChatGPT will be able

[02:25] to answer that question. Because here

[02:27] you are asking question and providing uh

[02:31] knowledge as a reference in the context,

[02:33] and it can pull the answer. But, what if

[02:36] your HR policy document is 3,000 page

[02:38] PDF, okay? What if that knowledge is

[02:41] very big? What's going to happen in that

[02:44] case is you will run out of your context

[02:46] window limit. And even if you have a

[02:48] huge context window,

[02:50] uh you should still not feed the entire

[02:53] knowledge because it will be too many

[02:56] tokens, it will be costly. So, what

[02:58] people do is they will chunk this

[03:01] document. So, they will create, let's

[03:02] say, basic strategy is fixed-size

[03:06] chunks. And then, for a given question,

[03:09] you can pull the relevant chunks. So,

[03:11] for this particular question, let's say

[03:13] my first chunk is 70% uh probability

[03:17] that it will it will contain the answer.

[03:19] Second chunk is 60% match. And you can

[03:21] have, by the way, I'm showing just

[03:22] three, but you can have 1,000 chunks,

[03:24] and some of the chunks might have 5% or

[03:27] even 10% possibility that it may contain

[03:30] the answer. Let's say the chunk contains

[03:33] uh information on uh when Atliq was

[03:36] founded culture founders etc. then

[03:39] that doesn't has anything to do with the

[03:41] retirement question that you are asking,

[03:43] okay? So, the the relevance of that

[03:46] chunk will be very, very low. Now, how

[03:48] do you exactly find this kind of

[03:50] similarity? So, there is this concept of

[03:53] embeddings, okay? So, embedding is a

[03:55] process of converting text into a vector

[03:59] such that it can represent its meaning,

[04:02] okay? So, all the chunks, you will

[04:04] convert them into vector embeddings, and

[04:08] then you will store them into a vector

[04:10] database. This is different than your

[04:12] regular database. Your regular database

[04:15] can search using exact values, whereas

[04:17] vector database will be able to search

[04:20] using the meaning. So, when you search

[04:22] for, let's say, uh a company that is a

[04:25] leader in electric vehicle, it will

[04:29] return Tesla uh from the database. So,

[04:31] it is searching based on the meaning,

[04:33] not based on the exact word. To generate

[04:36] embedding, you can use variety of

[04:38] models, sentence transformer, text

[04:40] embedding three small, and so on. And

[04:42] there are many vector database choices

[04:44] that you have in market, Milvus,

[04:46] Quadrant, Chroma DB, and so on. This

[04:48] step is called indexing. This is the

[04:51] first step in rag process, where you are

[04:54] indexing all these vectors of chunks

[04:57] into a vector database. The second step

[04:59] is retrieval, where for a given

[05:01] question, you will generate embedding

[05:03] using the same embedding model. Then,

[05:05] you will try to find the relevant chunks

[05:08] in a vector database. So, here it is

[05:10] doing the semantic search, giving you a

[05:13] relevant vectors. You can specify top K

[05:16] factor, let's say I need two chunks or

[05:18] five chunks, and so on. And then, you

[05:20] will generate the

[05:22] actual text out of those chunks, and you

[05:25] will put it in your prompt along with

[05:28] the question. And when the question is

[05:30] given to LLM, it will give you the

[05:32] answer. So, here uh below the question,

[05:35] what you are doing is you are providing

[05:37] only the relevant chunks. So, this way

[05:39] LLM will not hallucinate, and it will

[05:42] give you accurate answer. That takes us

[05:45] into our next segment, which is the two

[05:47] major benefits of rag. The first one is

[05:50] the answers that you get will be highly

[05:53] accurate, and the chances of

[05:56] hallucination will reduce because you

[05:59] are grounding your responses in the

[06:01] knowledge, in the source of truth.

[06:03] Second, it is very cost-effective

[06:05] because if you pass the entire context,

[06:07] then you are sending too many tokens to

[06:10] LLM, and these LLM APIs, they charge you

[06:13] per token. So, if you send less number

[06:15] of tokens, only the relevant knowledge,

[06:17] then you will save money on your API

[06:19] bill. Here is a hands-on customer care

[06:22] assistant rag project. I have given the

[06:24] code in the video description below. You

[06:26] can ask different questions, for

[06:27] example, why is my mobile internet slow?

[06:30] And it will find the answer based on the

[06:33] knowledge that it has. So, the knowledge

[06:35] is stored in terms of the

[06:37] troubleshooting PDF file. So, here is

[06:39] the PDF file, and let's say you have

[06:42] this question on how do you want to

[06:44] enable the LTE, then it is pulling that

[06:47] answer from this particular PDF file.

[06:50] The other source is the CSV file

[06:53] containing all the FAQs. And the third

[06:56] source is a SQLite database containing

[06:59] all the past ticket. Here we are using

[07:01] Chroma DB as vector database. So, we are

[07:03] ingesting FAQs, then PDF, and tickets

[07:07] into Chroma DB, okay? So, these are the

[07:10] three files which is ingesting into a

[07:12] vector database. If you look at ingest

[07:14] PDF, here we are using the chunk size of

[07:17] 600, overlap of 100. We are using the

[07:19] recursive character text splitter

[07:22] strategy. And for embedding, we are

[07:24] using this particular embedding model

[07:26] from Hugging Face. As a framework, we

[07:28] have used LangChain. Now, the retriever

[07:31] will try to find relevant chunks from

[07:34] FAQ, tickets, or guides. In terms of

[07:37] LLM, we are using Quen from Chat Grok.

[07:40] Please download the project on your

[07:41] computer, try to run it to enhance your

[07:44] understanding on rag concepts. Telecom

[07:47] support chatbot that we just saw is an

[07:49] example of enterprise QA chatbot. There

[07:52] are many other industry use cases for

[07:55] rag. For example, you can build medical

[07:57] knowledge assistant, which can look at

[08:00] the vast amount of medical knowledge and

[08:02] pulls a relevant answer for your query.

[08:05] The other one is legal and compliance

[08:07] tools. Once again, here the knowledge

[08:09] will be your legal documents, and you

[08:12] want to pull the most relevant and

[08:14] accurate answer. HR chatbot is another

[08:16] example. Let's now look at rag

[08:18] categories. The first one is a vector

[08:20] rag, and naive rag is the example that

[08:23] we just saw, where you pull the top K

[08:27] relevant chunks from a vector database

[08:29] and answer user's question. The second

[08:32] category is vectorless rag, in which you

[08:35] can perform a keyword rag. So, here you

[08:38] are not generating any vector

[08:40] embeddings. You don't have a vector

[08:42] database, but you are using keyword

[08:45] match, uh techniques like BM25, TF-IDF,

[08:49] etc., to uh query into the document

[08:52] using the exact keywords. This method

[08:55] will work when you have a lot of codes,

[08:58] jargons, IDs, citations. Let's say you

[09:01] are doing research, and you are always

[09:03] searching using some particular ID or a

[09:07] particular keyword, then this will work.

[09:10] This is weak for semantic understanding.

[09:12] When you are not doing exact keyword

[09:14] matching and searching using meaning,

[09:16] this is not a good choice. And the key

[09:19] tools that uses keyword rag concepts

[09:21] like BM25 is Elasticsearch and Apache

[09:25] Solr. The next category in vector rag is

[09:28] hybrid rag, where you're combining

[09:31] vector search and keyword search, okay?

[09:34] You do both of these in parallel and

[09:37] merge the results. This is best for most

[09:39] of the production systems. The key tools

[09:42] here are Elasticsearch plus any vector

[09:45] DB. Now, in Atliq, we worked on one rag

[09:49] project for our client, where we have

[09:51] developed our own custom hybrid method

[09:55] for doing rag, and we have given details

[09:57] of this approach in a different video.

[10:00] You can check it out if you are

[10:01] interested. Also, if you want to learn

[10:03] AI engineering by building production

[10:05] grade AI systems similar to the projects

[10:07] that I just mentioned, then check our AI

[10:10] engineering cohort where we have live

[10:13] sessions on weekends and we will teach

[10:16] you all the concepts plus you will build

[10:18] eight plus production grade projects.

[10:20] The next category in vector less rag is

[10:22] a graph rag. It is also known as KG rag.

[10:27] So here you will generate a knowledge

[10:29] graph. So let's say your knowledge is

[10:31] Elon Musk and all the companies he has

[10:33] founded. So in that case you will build

[10:35] this kind of knowledge graph where you

[10:37] will say Elon Musk founded Tesla,

[10:39] SpaceX, Neuralink, OpenAI and so on.

[10:42] And then these companies will be

[10:43] operating in these different domains. So

[10:45] these are all the entities and they are

[10:47] connected through some kind of

[10:49] relationship. Now when you ask a

[10:51] question, which companies are founded by

[10:53] Elon Musk which are working in AI, you

[10:56] will traverse this particular path,

[10:58] okay? So you will look at all the

[11:00] companies and then you will do breadth

[11:02] first traversal and you will find that

[11:05] OpenAI is working in AI. The next one is

[11:08] SQL rag. This is also known as text to

[11:11] SQL. This method is very simple. Let's

[11:13] say you have sales database which

[11:15] contains the sales of

[11:18] products. Now you are asking this

[11:19] question, which product sold the most

[11:21] last month? Using LLM you can first

[11:24] generate a query for that database. You

[11:26] will execute the query, get the results

[11:29] and then give it back to LLM to generate

[11:31] a comprehensive answer. Very simple

[11:33] technique. You are taking a sentence in

[11:36] a natural language, converting it to SQL

[11:38] using LLM and putting a query in your

[11:41] database to get the results. And the

[11:43] last method, which is relatively new, is

[11:47] called page index. It is reasoning based

[11:50] rag. So here let's say you have 3,000

[11:53] page PDF document. First you will

[11:56] generate the table of content, okay? The

[11:59] table of content or your information

[12:02] structure. This is like you are having a

[12:04] book and you are having all the chapter

[12:06] and topic layout. Now when somebody asks

[12:08] this question, what does the contract

[12:09] say about compensation for breach of

[12:11] contract, the LLM will use its reasoning

[12:15] capability and this particular table of

[12:18] content to traverse this particular

[12:22] graph and locate the thing that it is

[12:25] looking for. So for example, in this

[12:28] case it will first find out that this is

[12:30] related to performance of contracts

[12:32] because the contract is already

[12:33] executed. So it has to be related to

[12:35] this and then it finds compensation of

[12:38] breach. So it goes from here to here and

[12:40] then

[12:41] you are discussing loss. So due to that

[12:44] it will out of all these nodes, it will

[12:46] go to this particular node and it will

[12:49] pull the relevant document. Now this

[12:53] might give you an index and using index

[12:55] you might have to refer back to the

[12:57] original knowledge. So here is the

[12:59] GitHub for page index. It is known as

[13:02] vector less rag but it is one of the

[13:04] categories of vector less rag, okay? The

[13:07] right term is reasoning based rag. So

[13:10] here you can see from document you are

[13:11] generating a tree, which is your

[13:13] knowledge tree structure index of

[13:16] documents and then LLM will do its

[13:18] reasoning to find the relevant chunk.

[13:21] Here you are not using any vectors. You

[13:22] are not using any

[13:24] embeddings. No vector DB. Just by

[13:26] looking at the the structure, you know,

[13:30] the table layout, which looks something

[13:32] like this,

[13:33] you will try to find a given node, okay?

[13:36] And see here there is a summary. So

[13:38] using the summary, LLM can reason and it

[13:41] can say, "Okay, maybe the answer is in

[13:44] this particular node." And then it will

[13:46] go to that node, refer to the original

[13:48] document and pull the answer. I have

[13:50] attached this PDF in the video

[13:51] description below where you have

[13:53] categories of rag. You also have a table

[13:56] comparing when to use what. It is not

[13:59] that

[14:00] reasoning rag is here so you should not

[14:02] use naive rag. You should use it when

[14:05] you have general text Q&A bots, etc. And

[14:08] the complexity here is low. The

[14:10] complexity in case of page index is

[14:12] high. You should use it when you have

[14:14] hierarchical tree index LLM traversal.

[14:18] You know, these are the use cases. So

[14:19] you can use this table to determine when

[14:21] to use what kind of rag. And at the end

[14:24] we have rag interview questions. All

[14:26] right, folks. So please check it out. If

[14:28] you have any question, post in the

[14:29] comment box below.

[14:33] >> [music]

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