Retrieval-Augmented Generation (RAG) systems face a performance ceiling, with even advanced implementations struggling to exceed 70-85% accuracy on complex enterprise queries. Despite improvements in hybrid search and agentic pipelines, RAG's effectiveness is limited by inherent challenges, particularly in domains like legal and healthcare where accuracy is critical. Recent studies indicate that even leading models like GPT-5.5 exhibit high hallucination rates, and established legal AI tools like Westlaw and LexisNexis show significant accuracy drops on complex tasks, failing to eliminate hallucinations. AI
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IMPACT Highlights the persistent challenges and accuracy limitations of RAG, suggesting current approaches may not fully address complex enterprise needs.
RANK_REASON The article discusses limitations and performance ceilings of RAG systems, citing academic studies and benchmarks. [lever_c_demoted from research: ic=1 ai=1.0]