Generative AI is what powers a tool that drafts an email reply, writes a first pass at a product description or produces a summary of a long document. It is distinct from older AI that mainly sorted or scored things, such as a spam filter or a credit risk model, because it produces new output rather than a label.
The common misconception is that generative AI understands what it writes the way a person does. A large language model predicts likely next words based on patterns in its training data, which is why its output can read confidently while still being wrong, and why review still matters for anything that reaches a customer or a financial record.