AI Engineer Interview Questions 2025RAG Architecture InterviewLLM System Design

Top 15 AI Engineering Interview Questions (2025): LLMs, RAG & System Design

Prepare for Senior AI Engineer roles with these 15 battle-tested questions covering LLM Architecture, RAG Systems, Fine-Tuning, and Production Engineering. Includes detailed answers and system design patterns.

S

Sidharth

November 26, 2025

The New Standard for AI Interviews

Based on the current landscape of AI engineering (2024-2025), the bar has been raised. Companies are looking for engineers who understand Generative AI, RAG pipelines, and Production LLM deployment.

These 15 questions cover Foundational Architecture, RAG Systems, Fine-Tuning, and Production Engineering, tailored for candidates with a backend and cloud focus.

The "Must-Know" RAG Architecture
Ingestion Pipeline
Load → Chunk → Embed
Vector DB
Pinecone / Milvus
Retrieval & Generation
Hybrid Search + LLM

I. LLM Architecture & Foundations

1. Explain the Self-Attention mechanism. What are Query, Key, and Value vectors?

Answer: Self-attention enables Transformers to weigh the importance of different words in a sequence relative to each other, capturing long-range dependencies.

  • Concept: For every token, the model calculates "attention" scores for every other token.
  • Q, K, V Vectors:
    • Query (Q): The current token looking for information (like a search query).
    • Key (K): The content of other tokens (like database keys).
    • Value (V): The actual information content.
  • Process: Dot product of Q and K determines relevance scores (normalized via Softmax). These weights multiply V to produce the final representation.

2. What is Tokenization, and how does it impact performance/cost?

Answer: Converting raw text into numerical tokens (sub-word units via BPE/Byte-Pair Encoding).

  • Performance: Poor tokenization fails on rare words/code. Efficient tokenizers compress text better, fitting more into the context window.
  • Cost: APIs charge per million tokens. Inefficient splitting = higher costs and latency.

3. What are "Hallucinations" and how do you mitigate them?

Answer: When LLMs confidently generate factually incorrect info (probabilistic prediction errors).

Mitigation Strategies:

  • RAG: Ground responses in verified external data.
  • Prompt Engineering: Instructions like "Answer only using provided context."
  • Temperature: Lowering (e.g., 0.0) favors deterministic outputs.
  • Chain-of-Thought (CoT): Step-by-step reasoning reduces logic errors.

II. Retrieval-Augmented Generation (RAG)

4. Explain the end-to-end RAG architecture.

Answer: Two main pipelines:

  1. Ingestion: Load Docs → Chunk (split text) → Embed (convert to vectors) → Store (Vector DB like Pinecone).
  2. Retrieval & Generation: User Query → Embed Query → Semantic Search (Cosine Similarity) → Augment Prompt with Context → LLM Generation.

5. Dense vs. Sparse Retrieval? When to use Hybrid Search?

  • Sparse (BM25): Matches exact keywords. Fast, explainable, but misses synonyms.
  • Dense (Vector): Matches semantic meaning ("canine" matches "dog"). Requires embeddings.
  • Hybrid Search: Combines both. Necessary because Dense misses specific IDs (like Product SKUs) that Keyword search catches. Often uses Re-ranking (Cross-Encoder) to merge results.

6. Chunking Strategies & Retrieval Quality

  • Fixed-Size: Simple split every N tokens. Can break sentences.
  • Recursive: Splits by paragraphs first, then sentences. Standard in LangChain.
  • Semantic: Splits based on meaning changes. Computational expensive.
  • Trade-off: Small chunks = precise retrieval, low context. Large chunks = high context, more noise.

7. How do you evaluate a RAG system?

Answer: Use frameworks like RAGAS or TruLens.

  • Retrieval Metrics: Hit Rate (Recall), MRR (Rank).
  • Generation Metrics: Faithfulness (no hallucinations), Answer Relevance (addressed query?).

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III. Fine-Tuning & Optimization

8. RAG vs. Fine-Tuning?

  • Use RAG: For frequent data changes (news), factual grounding, citations.
  • Use Fine-Tuning: For changing behavior/style (e.g., speak like a pirate), output formatting (JSON), or deep domain language patterns.
  • Hybrid: Fine-tune a small model to be a better RAG reasoner.

9. What is PEFT and LoRA?

Answer: Parameter-Efficient Fine-Tuning.

  • LoRA (Low-Rank Adaptation): Injects small rank decomposition matrices (A, B) into layers. Only trains these adapter weights, freezing the base model.
  • Benefit: Reduces trainable params by 99%, enabling training 70B models on consumer GPUs.

10. What is Quantization (QLoRA)?

Answer: Reducing weight precision (16-bit → 4-bit).

  • Impact: 4-bit models use 4x less VRAM.
  • QLoRA: Freezes base model in 4-bit while training LoRA adapters in 16-bit.

IV. System Design & Production

11. Handling Context Limits & "Lost in the Middle"?

  • Context Limits: Use Map-Reduce (summarize docs) or Refine strategies.
  • Lost in the Middle: LLMs ignore middle context. Fix: Re-rank relevant docs to the start/end of the prompt.

12. How to optimize GenAI latency?

  • Semantic Caching (GPTCache): Return cached answers for similar queries.
  • Streaming: Token-by-token response for perceived speed.
  • Smaller Models: Route simple queries to Llama-8B/GPT-4o-mini.
  • Parallel Retrieval: Query vector DB and APIs concurrently.

13. LLM vs. Agent?

LLM: Passive engine. Input → Output.

Agent: LLM + Tools + Loop. Observes task → Decides tool (Search, Calculator) → Executes → Repeats (e.g., ReAct pattern).

14. What is RLHF?

Answer: Reinforcement Learning from Human Feedback. Turns raw predictor into helpful Chatbot.

  • SFT: Supervised Fine-Tuning on Q&A.
  • Reward Model: Predicts human preference.
  • PPO: Optimizes LLM to maximize reward score.

15. Explain Chain-of-Thought (CoT).

Answer: Prompting model to generate intermediate reasoning steps ("Let's think step by step").

Mechanism: Generating reasoning tokens "buys compute time" to resolve logic dependencies before the final answer.

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