In a surprising development, OpenAI’s newest o3 and o4-mini AI models hallucinate more frequently than their predecessors reversing the expected trend of improving accuracy.
The Hallucination Problem
OpenAI’s internal testing shows concerning results:
- The o3 model hallucinated on 33% of questions about people—double the rate of previous models
- The o4-mini performed worse, hallucinating 48% of the time
- Even OpenAI admits it doesn’t fully understand why this is happening
Third-party testing by Transluce confirmed these issues, finding examples where o3 fabricated processes it claimed to have used, such as running code on external devices.
Why This Matters
This regression in factual reliability creates significant challenges for industries requiring accuracy:
- Legal firms can’t risk models inserting errors into contracts
- Financial institutions need reliable analysis without fabricated data
- Healthcare applications demand extremely high levels of accuracy
Even in areas where the models excel, problems persist. Workera CEO Kian Katanforoosh reports that while o3’s coding capabilities are impressive, it regularly generates broken website links.
The Reasoning Model Trade-off
The industry has pivoted to “reasoning models” as traditional approaches showed diminishing returns. These models improve performance without requiring massive computing resources but appear to make more claims overall—both accurate and inaccurate ones.
Potential Solutions
OpenAI is exploring several approaches:
- Web search integration (GPT-4o with search achieves 90% accuracy on some benchmarks)
- Specialized training techniques to reduce hallucinations
“Addressing hallucinations across all our models is an ongoing area of research,” said OpenAI spokesperson Niko Felix.
What’s Next
If scaling reasoning models continues to worsen hallucinations, finding solutions becomes increasingly urgent. For now, users should maintain appropriate skepticism about factual claims and implement verification processes—particularly for critical applications.
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