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2 min readAugust 14, 20250 views

Retrieval-Augmented Generation (RAG): Building Knowledge-Powered AI Agents

Complete guide to RAG implementation: knowledge base construction, embeddings, chunking strategies, hybrid search, and RAG vs. fine-tuning trade-offs.

Retrieval-Augmented Generation (RAG): Building Knowledge-Powered AI Agents

Introduction

Retrieval-Augmented Generation (RAG) combines the power of large language models with your own knowledge base, enabling AI agents to provide accurate, context-specific responses.

What is RAG?

RAG works by:

  1. Converting your knowledge base into embeddings (vector representations)
  2. Storing embeddings in a vector database
  3. Retrieving relevant context when answering questions
  4. Injecting context into the LLM prompt

Knowledge Base Construction

1. Content Collection

  • FAQ documents
  • Product documentation
  • Company policies
  • Case studies
  • Pricing information

2. Chunking Strategy

Break documents into chunks (typically 300-500 characters) that preserve context while enabling precise retrieval.

3. Embedding Generation

Convert chunks into 384-dimensional vectors using Vertex AI embeddings.

Hybrid Search

TKC uses a three-pronged approach:

  • Semantic Search: Vector similarity matching
  • Keyword Search: Traditional text matching
  • RRF Fusion: Reciprocal Rank Fusion combines results

RAG vs. Fine-Tuning

RAGFine-Tuning
Easier to update knowledgeRequires retraining
Lower costHigher cost
Faster to implementSlower to implement
Better for factual informationBetter for style/tone

Best Practices

  • ✅ Use hybrid search for best results
  • ✅ Chunk documents appropriately (300-500 chars)
  • ✅ Include metadata (tags, categories) for filtering
  • ✅ Regularly update knowledge base
  • ✅ Monitor retrieval quality

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