How does an AI chatbot work?
An AI chatbot converts the customer's message into a search over your own content, sends the best-matching passages to a language model along with instructions, and returns a grounded answer. If the request needs an action, the model calls a tool such as your calendar or CRM.
The retrieval step is what keeps answers accurate. Your documents are split into passages and indexed; each question retrieves the closest passages so the model answers from your material rather than general knowledge.
Guardrails sit on top: topics it must refuse, claims it may never invent, and confidence thresholds that trigger a human handoff. Without those, a demo works and production does not.