Understanding the Differences Navigating Beyond the Hype: Effective Strategies for Predictive AI Success


The advent of large language models (LLMs) has significantly transformed the landscape of artificial intelligence (AI) research and development. These models, such as GPT-4, Claude, Mistral and others, have showcased impressive capabilities in natural language, image and video processing tasks. However, it is crucial for business executives to understand that LLMs have inherent limitations that render them unsuitable for predictive AI work.

Limitations of LLMs for Predictive AI Work

  • Lack of Contextual Understanding: LLMs excel at processing and generating text, images and video based on statistical patterns in data but lack a deep understanding of contextual information. This limitation becomes pronounced in predictive AI work where decisions rely on intricate contextual cues. An LLM is great at creating a document work product such as a legal brief draft or an image. Machine learning (ML) based algorithms shine when interpreting large defined data sets predicting signals such as retail demand forecast, fraud detection or visual quality control in manufacturing.
  • Bias and Fairness Concerns: LLMs have been demonstrated to reproduce and even amplify biases present in the training data. In predictive AI work, where unbiased and fair outcomes are paramount, the inherent bias in LLMs can lead to discriminatory predictions. Some LLMs are also known to hallucinate as they are geared to provide answers that sound logical but might be based invented facts.
  • Interpretability and Transparency: LLMs are known for their black-box nature, making it challenging to interpret and explain the reasoning behind their predictions. In predictive AI work for business applications, having transparent models is crucial for building trust and understanding the decision-making process. Predictive models are used as a basis for business decisions requiring process transparency in order to be  trusted. There’s a fundamental behavioral transformation that is taking place with AI that requires employees and stakeholders to trust AI outcomes.
  • Generalization to New Scenarios: While LLMs can perform well on specific tasks they are trained on, they often struggle to generalize to new, unseen scenarios. Predictive AI work requires models that can adapt and generalize effectively to diverse contexts and datasets. An example of adapting model is retail inventory prediction with ML. A machine learning model that is re-training as new sales and other data becomes available over time can take into account consumer behavior adjustment and seasonality. An LLM would be able to explain context but not predict what impact it would have.

Alternatives for Predictive AI Work

  • Customized Machine Learning Models: Developing customized machine learning models tailored to specific predictive tasks can overcome the limitations of LLMs. By training models on domain-specific data and features, businesses can achieve higher performance and interpretability in predictive AI work. For instance, at Kloud9 we’ve developed a predictive solution called Stockout Sentinel that can predict unknown stock-outs in retail stores five days in advance with over 97% accuracy validated with cycle counts.
  • Hybrid Approaches: Hybrid models that combine the strengths of LLMs with traditional machine learning algorithms can offer a balanced approach for predictive AI work. Leveraging the language processing capabilities of LLMs alongside interpretable models enhances both accuracy and transparency. Hybrid models with workflow agents can offer intelligent process automation where ML algorithms provide the signals and LLM models offer instructions for actions either for humans or other digital processes.
  • Domain-Specific Feature Engineering: Incorporating domain knowledge and designing task-specific features can improve the predictive power of AI models. By focusing on relevant features and data representations, businesses can enhance the performance of predictive AI systems.


While LLMs have revolutionized natural language processing tasks and get most of the marketing hype, they are not suitable for factual predictive AI work due to their limitations in contextual understanding, bias concerns, interpretability, and generalization. Business executives must recognize the constraints of LLMs and explore alternative approaches such as customized models, hybrid frameworks, and domain-specific feature engineering to drive predictive AI initiatives successfully. By acknowledging these limitations and embracing tailored solutions, businesses can harness the power of AI for informed decision-making and strategic planning.

Working with an experienced team like Kloud9 will help businesses choose the right approach to address the business opportunity and drive for desired outcomes.

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