AI Academy · Module 4: Adapting AI

Fine-Tuning, LoRA and Retrieval

Choose between prompting, retrieval-augmented generation and parameter-efficient fine-tuning based on the actual problem.

Lesson 9 of 11 · Reference topic 13 · Advanced learner pilot · Educational review pending

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Start with the big idea

Prompting changes the instructions. Retrieval supplies information at request time. Fine-tuning updates selected model parameters using training examples. These solve different problems.

Understand it in more detail

Retrieval-augmented generation (RAG) adds source material to the prompt at runtime, making it useful for documents that change or require attribution. It still needs access control, freshness checks and answer evaluation.

Fine-tuning adapts learned weights or small additional components to training examples. Full fine-tuning updates the base model broadly; parameter-efficient approaches can train smaller components while freezing most original weights.

LoRA represents an update to a weight matrix using a product of low-rank matrices. QLoRA combines LoRA-style training with a quantized base model to reduce memory use in suitable configurations. Neither automatically fixes hallucinations or removes the need for evaluation.

Worked example

A help desk needs yesterday's policy update: retrieve the current policy. A reporting assistant needs to consistently output a specialized structured format across many cases: consider prompting first, then fine-tuning if evaluated performance remains insufficient.

Teaching examples are illustrative unless an external source or real model measurement is explicitly identified.

A misconception to avoid

Fine-tuning is not a reliable replacement for a constantly changing knowledge base. Performance benefits depend on task, dataset quality, validation, compute budget and deployment conditions.

Check your understanding

Think first, then open each answer to check your explanation. These self-checks do not record a score.

1. Which approach best exposes a newly edited reference document?

Retrieval at inference time, with freshness and authorization checks.

2. Does LoRA require training all base model parameters?

No. It typically trains small low-rank adaptation parameters while base weights are frozen.

Try it yourself

Create a decision table for three fictional needs: current handbook lookup, consistent extraction format and custom terminology. Include data requirements and evaluation risks.

Explain it back: Summarize the main idea in your own words and name one limitation or risk.

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