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Retrieval-augmented generation (RAG)

RAG lets a model use selected, current knowledge without being retrained. It is only as good as the evidence it retrieves and how well the model uses it. A long-context model is another option when the knowledge base fits.

high conviction growth

Research snapshot · updated Nov 12, 2026

State of the art (2026)

By mid-2026, naive vector RAG is a baseline, not a finished system. The default production pattern is hybrid retrieval (semantic plus keyword) followed by a reranking pass, with agentic RAG – a reasoning loop that decomposes the query, retrieves, critiques and retrieves again – now standard for hard questions. Microsoft GraphRAG, open-sourced in 2024, earns its cost on cross-document, connect-the-dots queries, and adaptive routing of each query to the cheapest sufficient pipeline is the emerging best practice. Long context has not killed RAG: Claude Opus and Sonnet 4.6 and Gemini 3 Pro all ship 1M-token windows, yet recall degrades past roughly 600-700K tokens, so retrieval still grounds enterprise systems. Glean ($7.2B, ~$300M ARR) anchors the productised layer.

Core thesis

RAG gives a language model access to private or current information that was not in its training data, by retrieving relevant documents and passing them to the model. Tools such as LlamaIndex and LangChain build the pipelines, and vector databases such as Pinecone and Weaviate store the indexed text. Answer quality depends on how documents are split, which embedding model is used and how precise retrieval is. Retrieval does not guarantee a correct answer. Research continues: Microsoft's GraphRAG builds a graph and layered summaries of a document set to answer questions about the whole set, which simple retrieval handles poorly.

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Signal stack

Evidence stacked leading → lagging

10 signals
talent
research
patent
expert
operational
market

Technology-native KPIs

Metrics that predict trajectory, tracked over time

4 tracked
Enterprise RAG Adoption
Vector Database Market
RAG Accuracy Improvement
Hallucination Reduction

Landscape map

Who builds what, and who depends on whom

69 players · 6 layers

Catalyst calendar

Dated events that will move the position

5 ahead

Technology roadmap

Milestones on the path to maturity

8 milestones

Watchlists

Companies, people and papers, each with a condition for removing it

3 · 20
Companies · 3
People · 20

Decision frameworks

What our view means for your job

Locked
Public Equity
PE / VC
Corporate Leader

Thesis changelog

When our view changed, and why

8 updates

Change our mind

3 disconfirming conditions

You've read the verdict. The file is much deeper.

The full signal stack, technology-native KPIs tracked over time, the landscape of who depends on whom, the dated catalyst calendar, decision frameworks for every desk, live watchlists and a record of every time our view on Retrieval-augmented generation (RAG) has changed. All of it is in CanaryIQ.