My poor understanding is that an LLM does not "know" either. It basically uses probabilities to predict the next word based on a large matrix of probable outcomes.

For example, say I ask an LLM, "What sentence in English contains every letter in the alphabet?"

It would respond with something like:

"The quick fox jumps over the lazy, brown [next word]"

(Assume all the words were previously guessed correctly at this point)

The LLM guesses the last word based on what it has been trained on. Let's pretend the matrix is small, and the options narrow down to something like:

1. Dog (99.9% confidence) 2. Cow (85% confidence) 3. Bag (75% confidence) 4. Crayon (25% confidence)

The machine can confidently determine the final word of the sentence, "The quick fox jumps over the lazy, brown dog" because that sentence is unique because it is often used for testing things like fonts, a fun piece of trivia, and so on.

Brown Cow is not a bad guess because it's a type of cow and a yogurt brand. Brown bags and brown crayons are also perfectly rational adjectives to describe those common items and are not a bad guess either.

However, in the context of that sentence, dog is the most correct answer because one is unlikely to have written "The quick fox jumps over the lazy, brown crayon," thus it is quite improbable to be the answer.

My understand is this is where hallucinations can often come from. If the trivia about the sentence happened to not be in common in the data set, then "brown cow" might not be a terrible guess. There is clearly something rational behind that answer, but it's not correct in the sense that it answers the question correctly nor followed the instruction properly.

I'm sure the LLMs we have are far more capable these days. In fact, it wouldn't surprise me if an LLM could check its answer by counting the distinct letters in each word to verify. Not sure though.

Again, this is just a poor example based on my understanding, but I hope it helps (and is more correct than not).

Edit: Pretend word = token. It's technically tokens and not entire words, but I didn't not want to get into tokenization of words.