How Do Large Language Models Work?

Large language models typically operate through a three-stage process: large-scale training, understanding input, and generating output. The first stage is “pre-training,” where models analyze massive datasets of text and code from books, articles, and websites to learn the patterns, grammar, and relationships in human language. This phase requires immense computational power. Next, when a user provides a prompt, the LLM uses its training to comprehend the context, intent, and nuances of the request. Finally, the model generates a response by predicting the most probable sequence of words to form a coherent and contextually relevant answer. A 2025 article in Nature explains that this training can be adapted through strategies like Continued Pre-training (CPT) for new data and Supervised Fine-Tuning (SFT) for specialized tasks [2].

The knowledge an LLM gains during training is stored in its parameters, which can be thought of as the internal variables the model adjusts to make predictions. Modern models can have billions of parameters, enabling them to capture highly complex language patterns. After initial training, a model can undergo “fine-tuning,” where it is trained further on a smaller, specialized dataset to improve its performance on a specific task, like answering medical questions. This is similar to a chef who first learns all the basics of cooking (pre-training) and then specializes in a specific cuisine (fine-tuning). However, it’s important to note that this specialization can have trade-offs. An MIT CSAIL-affiliated study from 2024 observed that “fine-tuning can cause forgetting in domains not present in the fine-tuning data” [3].

Real-World Large Language Model Examples

Everyday Consumer Applications

Many popular digital tools that people use daily are powered by large language models, often working behind the scenes to make tasks easier and more intuitive.

  • Email Assistants: Features like Gmail’s Smart Compose or Outlook’s suggested replies, which predict and suggest ways to finish your sentences, are driven by LLMs. They analyze the context of your email to help you write faster.
  • Advanced Search Engines: Modern search engines increasingly use LLMs to understand complex, conversational queries. They can provide direct summary answers, like those seen in Google’s AI Overviews, by synthesizing information from multiple sources.
  • Translation Services: Tools such as Google Translate and DeepL leverage LLMs to deliver more nuanced and context-aware translations. They go beyond word-for-word translation to capture the intended meaning of sentences and paragraphs.

Business and Creative Use Cases

Beyond personal convenience, businesses and creative professionals are using LLMs to enhance productivity and drive innovation across various industries.

  • Content Creation: LLMs are widely used to assist with writing tasks, from drafting articles and marketing copy to generating social media posts and brainstorming ideas. These are some of the most popular llm use cases.
  • Code Generation: Developers utilize LLM-powered tools like GitHub Copilot to write, debug, and document code more efficiently. The model can suggest entire blocks of code based on a simple natural language description.
  • Data Analysis: LLMs can process and analyze vast amounts of unstructured text data. Businesses use this capability to summarize long reports, identify trends from customer feedback, and extract key insights from documents, making llm for data analysis a valuable application. A 2025 review in Nature – Scientific Reports highlights diverse llm applications in finance for fraud detection, in healthcare for diagnostics, and in e-commerce for recommendation systems [4].

LLM vs. Generative AI vs. AI: What’s the Difference?

These terms are often used together, but they are not interchangeable; they represent different levels of specificity within the field of artificial intelligence. Thinking about them with an analogy can help. AI (Artificial Intelligence) is the entire universe of machines or systems that can simulate human intelligence. Generative AI is a specific galaxy within that universe, containing systems focused on creating new content like text, images, or music. This allows us to answer what is a large language model in a comparative context: LLMs are like a solar system within the generative AI galaxy, specialized specifically in understanding and generating text-based content. According to a 2023 report from Georgetown’s CSET, this distinction is key: Generative AI is a broad class, while LLMs are a specialized type of generative AI focused on text [1].

To make this even clearer, here is a side-by-side comparison.

Feature Artificial Intelligence (AI) Generative AI Large Language Model (LLM)
Scope Broadest Field Subfield of AI Type of Generative AI
Primary Function Simulate intelligence, solve problems Create new, original content Understand and generate human language
Example Chess-playing computer, recommendation algorithms Midjourney for images, an ai model vs llm like a text generator ChatGPT, Google Gemini

What Are the Different Types of LLM Models?

LLMs can be categorized in several ways, but two of the most common classifications are based on their purpose (general vs. specialized) and their accessibility (open-source vs. proprietary). Understanding these differences is important because the type of model often determines its cost, flexibility, and the best use case for a specific problem. An llm model comparison can help clarify which type is suited for a particular task.

General vs. Specialized LLMs

General-purpose LLMs are models designed to handle a wide variety of tasks without needing significant modification. They can write, summarize, translate, and code across many different topics. Examples like OpenAI’s GPT-4 or Google’s Gemini are built to be versatile and broadly capable. In contrast, specialized or domain-specific LLMs are trained on a curated dataset for a niche field. For instance, models like Med-PaLM (for medicine) or BloombergGPT (for finance) are fine-tuned to achieve higher accuracy and relevance within their specific domains. Research from Carnegie Mellon University’s AI department suggests that “Domain-specific LLMs trained with highly curated corpora are improving performance in healthcare, law, finance, and government workflows” [5].

Open-Source vs. Proprietary Models

Proprietary, or closed-source, LLMs are developed, owned, and controlled by a single company. Users typically access these powerful proprietary models, such as OpenAI’s GPT-4 or Anthropic’s Claude, through a paid API and have limited visibility into or control over the model’s underlying architecture. On the other hand, an open source llm model has its architecture and code made publicly available. Models like Meta’s Llama series or those from Mistral fall into this category. This approach can allow for greater transparency, customization, and potentially lower costs, though it may require more technical expertise to implement and manage. A 2024 study in Nature Digital Medicine offers a balanced view, noting that while open-source LLMs provide transparency, their “general performance still lags behind the best proprietary models” in some benchmarks [6].

FAQ – Answering Your Key LLM Questions

What is a large language model in simple terms?

A large language model is essentially a sophisticated “text prediction” engine. It has been trained on a massive library of books, articles, and websites to learn the patterns of human language. When you give it a prompt, it uses this knowledge to predict the most logical and coherent sequence of words to form an answer, similar to an advanced version of your phone’s autocomplete.

Is ChatGPT a large language model?

Yes, ChatGPT is a well-known application powered by a large language model. Specifically, it is built on top of OpenAI’s GPT (Generative Pre-trained Transformer) series of models, such as GPT-3.5 and GPT-4. The “GPT” model is the underlying LLM, while “ChatGPT” is the user-friendly chatbot interface that allows people to interact with it.

What is the difference between LLM and GPT?

“LLM” is the general category, while “GPT” is a specific type of LLM. Think of it like “car” and “Ford Mustang.” LLM (Large Language Model) is the broad term for any AI model of this type. GPT (Generative Pre-trained Transformer) is the specific, branded name for the series of LLMs created by OpenAI. So, all GPTs are LLMs, but not all LLMs are GPTs.

What are the benefits of large language models?

The primary benefits of large language models are efficiency, scalability, and accessibility. They can automate repetitive tasks like writing emails or summarizing documents, saving significant time. For businesses, LLMs may improve customer service through chatbots and provide valuable data insights. Their ability to understand natural language also makes complex information and creative tools more accessible to the general public. A 2024 report from V7 Labs estimates that productivity gains with LLMs could reach $600 billion across functional sectors [7]. Results may vary individually.

Limitations, Alternatives, and Professional Guidance

It’s important to acknowledge that LLMs have limitations. They can sometimes generate incorrect or biased information, a phenomenon often called “hallucinations.” Their knowledge is also limited to the data they were trained on, which means it can be outdated. A report from Stanford’s Center for Research on Foundation Models (CRFM) warns that “LLMs can generate misleading or factually incorrect information that can be convincingly human-like, raising significant risks of misinformation” [8]. These ethical risks, along with inherent biases learned from training data, highlight the need for ongoing research into AI safety.

While LLMs are powerful, they are not the only form of AI. One common alternative is predictive AI, which focuses on forecasting future outcomes based on historical data—such as in stock market prediction or sales forecasting—rather than generating new content. Another approach involves expert systems, which are older, rule-based AI systems that rely on a curated knowledge base from human experts. Though less flexible than LLMs, they can be more reliable for specific, narrow tasks. The most effective approach generally depends on the specific problem you are trying to solve.

Given the complexities, it is advisable for businesses to consult with AI specialists or data scientists before integrating LLMs into critical workflows. Professionals should always verify any critical information, especially in legal, medical, or financial contexts, generated by an LLM with a qualified human expert. LLMs are best viewed as powerful tools designed to assist and augment human expertise, not as a complete replacement for it in high-stakes fields.

Conclusion

In summary, a large language model is a transformative type of artificial intelligence trained to understand and generate human-like text. By processing vast datasets, these models learn the patterns of language, enabling them to power a wide range of applications from email assistants to advanced data analysis tools. They represent a powerful and increasingly accessible form of generative AI that is fundamentally changing how we create and interact with information. In today’s tech-driven world, understanding what is a large language model is becoming increasingly important.

As this technology continues to evolve, staying informed is key to harnessing its potential responsibly. The Tech ABC is dedicated to providing clear, practical guides on the latest advancements in artificial intelligence. To continue learning about the latest in AI, feel free to Read more of our guides on AI tools and trends.


References

  1. CSET Georgetown (2023). “What Are Generative AI, Large Language Models, and Foundation Models?”
  2. Nature (2025). “Continued Pre-training and Supervised Fine-Tuning for Model Adaptation.”
  3. MIT CSAIL-affiliated study (2024). “Fine-Tuning Can Cause Forgetting in Out-of-Domain Scenarios.”
  4. Nature – Scientific Reports (2025). “A Review of LLM Applications in Finance, Healthcare, and E-commerce.”
  5. Carnegie Mellon University AI Research. “Domain-Specific LLMs for Professional Workflows.”
  6. Nature Digital Medicine (2024). “Performance and Transparency of Open-Source vs. Proprietary LLMs.”
  7. V7 Labs (2024). “The Impact of Large Language Models on Enterprise Productivity.”
  8. Stanford HAI CRFM Report. “On the Opportunities and Risks of Foundation Models.”