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RAG vs Fine-Tuning vs Prompt Engineering: Optimizing AI Models
IBM Technology. A clear whiteboard pass through all three techniques with their respective costs — retrieval latency, training compute and catastrophic forgetting, the limits of prompt-only solutions — and the combinations that actually make sense in production. The closing example of a legal AI system using all three is almost exactly the article's "when to combine" argument.
AI Expert note
This is a stable decision framework. Use it before buying infrastructure or starting a fine-tune project; most wrong choices come from misdiagnosing freshness, attribution, style or behavior problems.
What you should get from this
Choose between prompt engineering, RAG, fine-tuning or a combination based on the actual failure mode.
Watch or know first
Know what each technique means at a high level.
Last reviewed: May 18, 2026
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