This paper reframes the concept of “hallucinations” in generative AI, arguing they are not always negative but can inspire creativity and innovation. While acknowledging the risks of misinformation, it shows how controlled hallucinations can fuel design thinking, scenario planning, and scientific discovery. Examples include creative arts, drug discovery, and marketing innovation. The paper stresses the need for context, domain expertise, and validation frameworks to distinguish useful outputs from harmful ones. By balancing creativity with caution, enterprises can leverage generative AI’s imaginative potential without undermining trust or decision-making accuracy.

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