·AI & ChatGPT

Module 1 Lesson 4: Understanding Capabilities and Limitations

Know what ChatGPT can do, and more importantly, what it cannot do. Avoid common pitfalls like hallucinations and memory limits.

Understanding Capabilities and Limitations

To be a "Power User," you must know where the tools fail. ChatGPT is powerful, but it is not infallible.

1. What it Can Do (Capabilities)

  • Creative Synthesis: Combining two unrelated ideas.
  • Translation: Translating between dozens of languages with cultural nuance.
  • Code Assistance: Fixing syntax and explaining logic.
  • Summarization: Turning a 10-page document into a 3-bullet list.

2. What it Cannot Do (Limitations)

Hallucinations

ChatGPT is a "next-word predictor." Occasionally, it will confidently state facts that are completely made up. This is known as hallucination.

[!WARNING] Never use ChatGPT for medical, legal, or financial advice without verifying the output with a human expert.

Knowledge Cutoff

The model's training data ends at a specific point in time. While newer versions can browse the web, their "internal" knowledge is frozen.

Reasoning vs. Calculation

ChatGPT is a language model, not a calculator. While it has improved, it can still make basic arithmetic errors on very large numbers.

Context Window Limit

The model has a "memory" for the current conversation. If the conversation gets too long, it will start to "forget" the earliest messages.

3. The "Stochastic Parrot" Concept

Some critics call LLMs "Stochastic Parrots"—meaning they repeat patterns with high probability without actually understanding the underlying meaning.

graph LR
    Capability[Capabilities] --> Creative[Creativity]
    Capability --> Speed[Speed]
    Capability --> Scale[Scale]
    
    Limit[Limitations] --> Hallu[Hallucinations]
    Limit --> Logic[Logic Errors]
    Limit --> Bias[Bias]
    Limit --> Cutoff[Knowledge Cutoff]

Hands-on: Spot the Hallucination

Ask ChatGPT a question about a very niche or non-existent topic: "Who was the first person to walk on the surface of the sun?"

Observe how it responds. A well-aligned model should tell you it's impossible, but sometimes you can "nudge" it into telling a story about a fictional person.

Key Takeaways

  • Verify everything. Never copy-paste facts blindly.
  • Use it for structure and creativity, but be cautious with data accuracy.
  • Know your model's knowledge cutoff date.

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