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AI Agent Evaluation: How to Conduct Effectively?

Building an AI agent involves more than just creating a functional prototype. While initial setups can be straightforward with the right frameworks, the real challenge lies in refining the agent to ensure it performs reliably in production. Issues such as inaccurate predictions, biases, and security flaws can arise without careful AI agent evaluation, undermining user trust and effectiveness.

As AI agents take on increasingly complex tasks, from personal assistants to industry-specific solutions, a rigorous evaluation process becomes essential. In this blog, we will dive into key strategies for assessing AI agents, covering critical areas to test and techniques to ensure your agent evolves from a simple model into a robust and production-ready tool. 

What is AI Agent Evaluation?

AI agent evaluation is the process of assessing how well an AI agent performs its intended tasks, interacts with users, and makes decisions. As these agents often operate autonomously, evaluation is crucial to ensure they function as expected, are efficient, and align with ethical guidelines. An AI agent must not only meet the needs of its users but also stay true to the goals set by the organization.

The evaluation covers several key areas, depending on the type of AI agent. For example, with generative AI agents like chatbots, assessment focuses on the relevance, coherence, and accuracy of their responses. 

For predictive models, common metrics include accuracy and recall, which measure the agent’s ability to make accurate predictions. In customer service applications, user satisfaction, conversational flow, and engagement are critical factors to evaluate.

In addition to performance metrics, ethical considerations are central to evaluation. AI agents must operate transparently, without bias, and safeguard user privacy. Evaluation methods include testing against benchmarks, A/B testing, and real-world simulations to ensure the agent adheres to responsible AI principles. 

By thoroughly evaluating AI agents, businesses can improve their functionality, enhance user experience, and reduce the risks of deploying unreliable or biased systems.

AI Agent Evaluation: Why Does it Matter?

AI agent evaluation is crucial for ensuring that agents perform reliably, ethically, and efficiently across a variety of real-world tasks. Here’s why it’s essential:

1. Catch Issues Early

Changes to an AI agent’s code or functionality can introduce regressions or unexpected issues. Regular evaluation helps identify problems early to ensure that updates lead to improvements, not setbacks.

2. Monitor Performance

Evaluation helps track the AI’s performance over time. If user satisfaction drops, evaluations can help identify the cause. They can determine if the issue is related to a recent update. Alternatively, evaluations may reveal problems with the agent’s behavior, such as errors in decision-making or inaccurate responses.

3. Ensure Fairness and Accuracy

AI agents often face unpredictable situations. By thoroughly evaluating an agent’s responses, especially in critical areas like finance or healthcare, you ensure that it makes fair, unbiased decisions under both routine and unexpected scenarios. This is key to building trust in the system.

4. Optimize Trade-offs

Newer, more powerful models can boost performance but may come with trade-offs like higher costs or slower response times. A strong evaluation system allows teams to make data-driven decisions about these trade-offs, balancing performance with resource utilization.

5. Build Confidence

Consistent evaluation ensures that the AI is improving over time, which boosts trust among stakeholders and teams. When the metrics correlate with real user experiences and reflect the team’s efforts, leaders will gain confidence in the agent’s capabilities and reliability.

6. Meet Regulatory Standards

In industries with strict regulations, such as finance or healthcare, thorough testing is necessary to comply with legal requirements. Demonstrating that your AI has been rigorously evaluated helps reassure regulators and users alike, ensuring that the agent meets safety, privacy, and fairness standards.

In short, ongoing AI agent evaluation not only helps detect problems early but also ensures that the agent adapts to changing environments and maintains high performance, keeping it both trustworthy and effective over time.

(Interested in implementing an AI agent? You can read our blog on How to build an AI agent?)

How Does AI Agent Evaluation Work?

How does AI Agent Evaluation Work

Evaluating an AI agent involves a systematic process to measure its performance and ensure it meets objectives across real-world conditions. Here’s how the process typically works:

1. Start with Clear Evaluation Goals

Before diving into testing, you need to set clear expectations. What exactly do you want your AI agent to achieve? 

Whether it’s answering customer questions or completing complex tasks, defining what success looks like is the first step. Establish metrics to measure performance, accuracy, user experience, and ethical considerations. Having concrete goals helps you evaluate how well the agent is meeting your objectives.

2. Building a Comprehensive Test Suite

a) Define Your Test Cases: Gather a mix of common and edge-case inputs reflecting the full range of potential user interactions. For example, if you are testing a virtual assistant, include typical requests like setting alarms and more complex ones like ambiguous or off-topic queries.

b) Cover All Agent Functions: Ensure your test suite covers all major tasks the agent should perform, from API calls to data retrieval and edge cases where things might go wrong. Regularly update this suite based on evolving user behavior and new edge cases.

Imagine testing your agent with real-world scenarios. Your test cases should include everything from standard queries to unexpected ones. Think of a customer service bot; the usual questions like “Where’s my order?” are just the beginning. 

Include edge cases, too, like “Can you book a flight from Paris to New York in the morning?” or “Why isn’t my order showing up?” This helps you prepare for all user behaviors.

But it doesn’t stop there. You will want to consider the agent’s full journey. What happens when it makes a decision or calls an API? Each step should be tested individually, whether it’s selecting a function or passing data. This allows you to track its progress and catch potential issues along the way.

3. Mapping Out the Agent’s Workflow

Now, it’s time to break down the agent’s internal workflow into manageable steps.

a) Decompose internal logic: Each significant action, like selecting a function, making a decision, or calling an API, should be tested individually. 

This way, you can isolate potential issues at each step of the process. For example, if the agent makes a mistake in its decision-making, you will know exactly which part of the workflow caused the error.

b) Map potential paths: Track the routes the agent can take to solve a problem. Does the agent choose the most efficient path, or does it get caught in unnecessary loops? 

You want to ensure the agent always follows the most direct and effective course of action. By visualizing these paths, you can spot inefficiencies, like when the agent might make redundant steps or take longer than necessary to reach a solution.

4. Selecting the Right Evaluation Methods

Now that you have your test suite and data, it’s time to choose how you will evaluate the agent’s actions. Two key strategies include:

a) Compare Against Expected Outcomes: When there is a clear, expected result (e.g., a known correct response or decision), compare the agent’s output to this expected result.

b) Use Qualitative Review: For tasks where no definitive correct answer exists (e.g., conversational flow or naturalness of responses), use alternative models like an LLM-as-a-judge or human reviewers to assess the agent’s performance qualitatively.

5. Evaluating Agent-Specific Challenges

AI agents often face unique challenges, particularly around skill selection, decision-making, and parameter passing. To address these:

a) Evaluate Decision-Making & Skill Selection: Ensure that the agent picks the right tools or skills for each task. For example, if the agent needs to choose between multiple functions, verify that it selects the correct one based on the situation.

b) Ensure Correct Parameter Passing: Check that the agent not only selects the right tool but also passes the correct parameters, like, when making API calls or passing data between steps.

c) Monitor Execution Path: Track if the agent ever gets stuck in loops or takes inefficient steps, which could impact its performance.

6. Conduct Testing in Different Environments

Run the agent in diverse real-world conditions to assess its adaptability and response under stress. For example, test a customer service chatbot with high-volume queries or when facing unexpected user input. By doing so, you ensure that the agent performs well in diverse and real-world situations.

7. Analyze Results and Identify Areas for Improvement

Once testing is complete, analyze the agent’s performance: 

a) Compare to Success Criteria: Review the agent’s output against predefined goals. Did it make the right decision? Was the response accurate and efficient? Identify areas where the agent performed well and areas that need refinement.

b) Assess Ethical Impacts: Evaluate whether the agent’s decisions align with fairness and transparency standards. For example, ensure that an AI recruitment tool doesn’t show bias towards any demographic group.

8. Optimize and Iterate

a) Refine Based on Insights: Make necessary adjustments based on the evaluation results. This could involve tweaking algorithms, improving logic, or optimizing the workflow for better scalability or resource efficiency.

b) Run Iterative Tests: After making improvements, re-run your test suite to ensure that changes have fixed the issues without introducing new ones. Regular iteration helps keep the AI agent in top shape over time.

By following these steps, you can ensure that your AI agent is tested thoroughly, performs reliably, and adheres to ethical standards. Continuous AI agent evaluation allows for ongoing refinement, thus helping agents remain effective and trustworthy as they adapt to real-world challenges.

AI Agent Assisting with an Online Purchase: An Example

Suppose you have an agent for online purchases; what goes for its evaluation: 

Behind the Scenes

  • Understanding the Request: The agent identifies a customer’s query about purchasing a product, such as a laptop.
  • Selecting the Right Tool: The agent chooses the appropriate product search API and might ask for preferences like brand, price range, or features.
  • Returning Results: The agent presents a list of products based on the customer’s preferences and confirms the purchase process.

AI Agent Evaluation

  • Tool Selection: Did the agent choose the correct API to search for laptops?
  • Accuracy of Parameters: Did it correctly extract the user’s preferences, like brand and price range?
  • Context Awareness: Did it use the context, like, if the user had previously shown interest in tech gadgets, to refine the results?
  • Response Quality: Was the response clear, accurate, and relevant to the user’s needs?

In this example, evaluating the agent involves checking whether it selects the correct tools, uses the right parameters, and provides a relevant and well-structured response. This evaluation helps ensure the agent is both functional and aligned with user expectations.

To evaluate each of these factors, you can use methods such as human feedback, human-in-the-loop systems, or even tools like LLM-as-a-judge. These approaches allow you to assess whether the agent’s responses meet the user’s requirements effectively, ensuring the agent behaves as expected across different situations.

Important Considerations When Evaluating AI Agents

At Markovate, we specialize in developing robust AI agents tailored to your specific needs. Our deep expertise allows us to go beyond simple functionality checks and focus on the intricate inner workings that drive agent performance. 

Here are the critical aspects to consider when evaluating AI agents to ensure optimal efficiency and reliability.

1. Router Evaluation

Router Evaluation-Consideration for Agent Evaluation

The router is a crucial component that decides which skill or function the agent should invoke based on user input. Evaluating the router involves two key factors:

a) Skill Selection

The router must accurately choose the right skill for each input. This requires clear prompts and well-defined functions to guide decision-making.

b) Parameter Extraction

Ensuring the router extracts the correct parameters from the input is critical. Overlapping parameters, like a tracking number included in an order status request, can confuse the agent. Test cases should stress-test these potential overlaps to evaluate the router’s efficiency.

2. Evaluating Agent Paths

The way an agent progresses through tasks can significantly impact its efficiency. Issues like repetitive actions or unnecessary loops can cause major disruptions in performance. Key points to monitor:

a) Redundant Steps: Does the agent repeat actions unnecessarily?

b) Stuck Loops: Does it get caught in an infinite loop or return to the router when it shouldn’t? Evaluating the execution path ensures that the agent moves efficiently from task to task without getting stuck or wasting resources. Using iteration counters or manual trace inspections helps track how many steps the agent takes to complete various queries.

3. Tool Call Accuracy

AI agents often rely on external tools or databases. Evaluating tool calls for accuracy is essential. For example, does the agent correctly access the relevant data from a database or execute API calls properly? Using models like LLM-as-a-judge can assist in this evaluation, ensuring correct tool usage at every step.

4. Manual Review and Observability

While automated evaluators are helpful, manual inspection is crucial during development. Observability tools allow developers to monitor the agent’s actions and diagnose issues early. Traces can reveal path errors or unexpected behaviors that would be difficult to spot otherwise.

5. Iterating and Experimenting

Once you have evaluated and identified areas for improvement, it’s time to iterate. After modifying the agent, rerun your test cases and evaluators to ensure changes haven’t inadvertently affected performance. Experimentation, combined with a structured evaluation framework, helps refine the agent’s behavior over time.

By focusing on the router’s decision-making, execution path, and tool accuracy, you gain deeper insights into how well the agent performs in real-world scenarios and can avoid common pitfalls that often arise in complex AI systems.

Sum Up

Effective evaluation is essential to building a high-performing AI agent. By systematically assessing each component, from skill selection to execution flow, along with continuous real-world testing, you ensure that your agent functions as intended and adapts to user needs. 

At Markovate, we believe that regular testing, refinement, and optimization are key to creating AI agents that not only meet performance expectations but also balance trust, efficiency, and user satisfaction. A well-evaluated agent isn’t just a tool; it’s a reliable partner in solving real-world challenges.

Contact us for more information!

Building an AI agent involves more than just creating a functional prototype. While initial setups can be straightforward with the right frameworks, the real challenge lies in refining the agent to ensure it performs reliably in production. Issues such as inaccurate predictions, biases, and security flaws can arise without careful AI agent evaluation, undermining user trust and effectiveness.

As AI agents take on increasingly complex tasks, from personal assistants to industry-specific solutions, a rigorous evaluation process becomes essential. In this blog, we will dive into key strategies for assessing AI agents, covering critical areas to test and techniques to ensure your agent evolves from a simple model into a robust and production-ready tool. 

What is AI Agent Evaluation?

AI agent evaluation is the process of assessing how well an AI agent performs its intended tasks, interacts with users, and makes decisions. As these agents often operate autonomously, evaluation is crucial to ensure they function as expected, are efficient, and align with ethical guidelines. An AI agent must not only meet the needs of its users but also stay true to the goals set by the organization.

The evaluation covers several key areas, depending on the type of AI agent. For example, with generative AI agents like chatbots, assessment focuses on the relevance, coherence, and accuracy of their responses. 

For predictive models, common metrics include accuracy and recall, which measure the agent’s ability to make accurate predictions. In customer service applications, user satisfaction, conversational flow, and engagement are critical factors to evaluate.

In addition to performance metrics, ethical considerations are central to evaluation. AI agents must operate transparently, without bias, and safeguard user privacy. Evaluation methods include testing against benchmarks, A/B testing, and real-world simulations to ensure the agent adheres to responsible AI principles. 

By thoroughly evaluating AI agents, businesses can improve their functionality, enhance user experience, and reduce the risks of deploying unreliable or biased systems.

AI Agent Evaluation: Why Does it Matter?

AI agent evaluation is crucial for ensuring that agents perform reliably, ethically, and efficiently across a variety of real-world tasks. Here’s why it’s essential:

1. Catch Issues Early

Changes to an AI agent’s code or functionality can introduce regressions or unexpected issues. Regular evaluation helps identify problems early to ensure that updates lead to improvements, not setbacks.

2. Monitor Performance

Evaluation helps track the AI’s performance over time. If user satisfaction drops, evaluations can help identify the cause. They can determine if the issue is related to a recent update. Alternatively, evaluations may reveal problems with the agent’s behavior, such as errors in decision-making or inaccurate responses.

3. Ensure Fairness and Accuracy

AI agents often face unpredictable situations. By thoroughly evaluating an agent’s responses, especially in critical areas like finance or healthcare, you ensure that it makes fair, unbiased decisions under both routine and unexpected scenarios. This is key to building trust in the system.

4. Optimize Trade-offs

Newer, more powerful models can boost performance but may come with trade-offs like higher costs or slower response times. A strong evaluation system allows teams to make data-driven decisions about these trade-offs, balancing performance with resource utilization.

5. Build Confidence

Consistent evaluation ensures that the AI is improving over time, which boosts trust among stakeholders and teams. When the metrics correlate with real user experiences and reflect the team’s efforts, leaders will gain confidence in the agent’s capabilities and reliability.

6. Meet Regulatory Standards

In industries with strict regulations, such as finance or healthcare, thorough testing is necessary to comply with legal requirements. Demonstrating that your AI has been rigorously evaluated helps reassure regulators and users alike, ensuring that the agent meets safety, privacy, and fairness standards.

In short, ongoing AI agent evaluation not only helps detect problems early but also ensures that the agent adapts to changing environments and maintains high performance, keeping it both trustworthy and effective over time.

(Interested in implementing an AI agent? You can read our blog on How to build an AI agent?)

How Does AI Agent Evaluation Work?

How does AI Agent Evaluation Work

Evaluating an AI agent involves a systematic process to measure its performance and ensure it meets objectives across real-world conditions. Here’s how the process typically works:

1. Start with Clear Evaluation Goals

Before diving into testing, you need to set clear expectations. What exactly do you want your AI agent to achieve? 

Whether it’s answering customer questions or completing complex tasks, defining what success looks like is the first step. Establish metrics to measure performance, accuracy, user experience, and ethical considerations. Having concrete goals helps you evaluate how well the agent is meeting your objectives.

2. Building a Comprehensive Test Suite

a) Define Your Test Cases: Gather a mix of common and edge-case inputs reflecting the full range of potential user interactions. For example, if you are testing a virtual assistant, include typical requests like setting alarms and more complex ones like ambiguous or off-topic queries.

b) Cover All Agent Functions: Ensure your test suite covers all major tasks the agent should perform, from API calls to data retrieval and edge cases where things might go wrong. Regularly update this suite based on evolving user behavior and new edge cases.

Imagine testing your agent with real-world scenarios. Your test cases should include everything from standard queries to unexpected ones. Think of a customer service bot; the usual questions like “Where’s my order?” are just the beginning. 

Include edge cases, too, like “Can you book a flight from Paris to New York in the morning?” or “Why isn’t my order showing up?” This helps you prepare for all user behaviors.

But it doesn’t stop there. You will want to consider the agent’s full journey. What happens when it makes a decision or calls an API? Each step should be tested individually, whether it’s selecting a function or passing data. This allows you to track its progress and catch potential issues along the way.

3. Mapping Out the Agent’s Workflow

Now, it’s time to break down the agent’s internal workflow into manageable steps.

a) Decompose internal logic: Each significant action, like selecting a function, making a decision, or calling an API, should be tested individually. 

This way, you can isolate potential issues at each step of the process. For example, if the agent makes a mistake in its decision-making, you will know exactly which part of the workflow caused the error.

b) Map potential paths: Track the routes the agent can take to solve a problem. Does the agent choose the most efficient path, or does it get caught in unnecessary loops? 

You want to ensure the agent always follows the most direct and effective course of action. By visualizing these paths, you can spot inefficiencies, like when the agent might make redundant steps or take longer than necessary to reach a solution.

4. Selecting the Right Evaluation Methods

Now that you have your test suite and data, it’s time to choose how you will evaluate the agent’s actions. Two key strategies include:

a) Compare Against Expected Outcomes: When there is a clear, expected result (e.g., a known correct response or decision), compare the agent’s output to this expected result.

b) Use Qualitative Review: For tasks where no definitive correct answer exists (e.g., conversational flow or naturalness of responses), use alternative models like an LLM-as-a-judge or human reviewers to assess the agent’s performance qualitatively.

5. Evaluating Agent-Specific Challenges

AI agents often face unique challenges, particularly around skill selection, decision-making, and parameter passing. To address these:

a) Evaluate Decision-Making & Skill Selection: Ensure that the agent picks the right tools or skills for each task. For example, if the agent needs to choose between multiple functions, verify that it selects the correct one based on the situation.

b) Ensure Correct Parameter Passing: Check that the agent not only selects the right tool but also passes the correct parameters, like, when making API calls or passing data between steps.

c) Monitor Execution Path: Track if the agent ever gets stuck in loops or takes inefficient steps, which could impact its performance.

6. Conduct Testing in Different Environments

Run the agent in diverse real-world conditions to assess its adaptability and response under stress. For example, test a customer service chatbot with high-volume queries or when facing unexpected user input. By doing so, you ensure that the agent performs well in diverse and real-world situations.

7. Analyze Results and Identify Areas for Improvement

Once testing is complete, analyze the agent’s performance: 

a) Compare to Success Criteria: Review the agent’s output against predefined goals. Did it make the right decision? Was the response accurate and efficient? Identify areas where the agent performed well and areas that need refinement.

b) Assess Ethical Impacts: Evaluate whether the agent’s decisions align with fairness and transparency standards. For example, ensure that an AI recruitment tool doesn’t show bias towards any demographic group.

8. Optimize and Iterate

a) Refine Based on Insights: Make necessary adjustments based on the evaluation results. This could involve tweaking algorithms, improving logic, or optimizing the workflow for better scalability or resource efficiency.

b) Run Iterative Tests: After making improvements, re-run your test suite to ensure that changes have fixed the issues without introducing new ones. Regular iteration helps keep the AI agent in top shape over time.

By following these steps, you can ensure that your AI agent is tested thoroughly, performs reliably, and adheres to ethical standards. Continuous AI agent evaluation allows for ongoing refinement, thus helping agents remain effective and trustworthy as they adapt to real-world challenges.

AI Agent Assisting with an Online Purchase: An Example

Suppose you have an agent for online purchases; what goes for its evaluation: 

Behind the Scenes

  • Understanding the Request: The agent identifies a customer’s query about purchasing a product, such as a laptop.
  • Selecting the Right Tool: The agent chooses the appropriate product search API and might ask for preferences like brand, price range, or features.
  • Returning Results: The agent presents a list of products based on the customer’s preferences and confirms the purchase process.

AI Agent Evaluation

  • Tool Selection: Did the agent choose the correct API to search for laptops?
  • Accuracy of Parameters: Did it correctly extract the user’s preferences, like brand and price range?
  • Context Awareness: Did it use the context, like, if the user had previously shown interest in tech gadgets, to refine the results?
  • Response Quality: Was the response clear, accurate, and relevant to the user’s needs?

In this example, evaluating the agent involves checking whether it selects the correct tools, uses the right parameters, and provides a relevant and well-structured response. This evaluation helps ensure the agent is both functional and aligned with user expectations.

To evaluate each of these factors, you can use methods such as human feedback, human-in-the-loop systems, or even tools like LLM-as-a-judge. These approaches allow you to assess whether the agent’s responses meet the user’s requirements effectively, ensuring the agent behaves as expected across different situations.

Important Considerations When Evaluating AI Agents

At Markovate, we specialize in developing robust AI agents tailored to your specific needs. Our deep expertise allows us to go beyond simple functionality checks and focus on the intricate inner workings that drive agent performance. 

Here are the critical aspects to consider when evaluating AI agents to ensure optimal efficiency and reliability.

1. Router Evaluation

Router Evaluation-Consideration for Agent Evaluation

The router is a crucial component that decides which skill or function the agent should invoke based on user input. Evaluating the router involves two key factors:

a) Skill Selection

The router must accurately choose the right skill for each input. This requires clear prompts and well-defined functions to guide decision-making.

b) Parameter Extraction

Ensuring the router extracts the correct parameters from the input is critical. Overlapping parameters, like a tracking number included in an order status request, can confuse the agent. Test cases should stress-test these potential overlaps to evaluate the router’s efficiency.

2. Evaluating Agent Paths

The way an agent progresses through tasks can significantly impact its efficiency. Issues like repetitive actions or unnecessary loops can cause major disruptions in performance. Key points to monitor:

a) Redundant Steps: Does the agent repeat actions unnecessarily?

b) Stuck Loops: Does it get caught in an infinite loop or return to the router when it shouldn’t? Evaluating the execution path ensures that the agent moves efficiently from task to task without getting stuck or wasting resources. Using iteration counters or manual trace inspections helps track how many steps the agent takes to complete various queries.

3. Tool Call Accuracy

AI agents often rely on external tools or databases. Evaluating tool calls for accuracy is essential. For example, does the agent correctly access the relevant data from a database or execute API calls properly? Using models like LLM-as-a-judge can assist in this evaluation, ensuring correct tool usage at every step.

4. Manual Review and Observability

While automated evaluators are helpful, manual inspection is crucial during development. Observability tools allow developers to monitor the agent’s actions and diagnose issues early. Traces can reveal path errors or unexpected behaviors that would be difficult to spot otherwise.

5. Iterating and Experimenting

Once you have evaluated and identified areas for improvement, it’s time to iterate. After modifying the agent, rerun your test cases and evaluators to ensure changes haven’t inadvertently affected performance. Experimentation, combined with a structured evaluation framework, helps refine the agent’s behavior over time.

By focusing on the router’s decision-making, execution path, and tool accuracy, you gain deeper insights into how well the agent performs in real-world scenarios and can avoid common pitfalls that often arise in complex AI systems.

Sum Up

Effective evaluation is essential to building a high-performing AI agent. By systematically assessing each component, from skill selection to execution flow, along with continuous real-world testing, you ensure that your agent functions as intended and adapts to user needs. 

At Markovate, we believe that regular testing, refinement, and optimization are key to creating AI agents that not only meet performance expectations but also balance trust, efficiency, and user satisfaction. A well-evaluated agent isn’t just a tool; it’s a reliable partner in solving real-world challenges.

Contact us for more information!

Rajeev Sharma

Author

Rajeev Sharma is the Co-Founder and CEO of Markovate, a visionary technologist with deep expertise in AI, cloud computing, and mobile. With over 18 years of experience, he has collaborated with global companies such as AT&T and IBM to lead transformative AI-driven initiatives. Rajeev works closely with organizations to help them harness the latest technologies, drive innovation, optimize operations, and achieve growth. Under his leadership, Markovate continues to redefine the role of Generative AI, creating custom solutions with measurable business impact.

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