GuideSep 13, 2023

What is Prompt Engineering in AI and How Does it Work?

Prompt engineering is like teaching an AI how to respond correctly by using carefully chosen words and context. How does this method ensure AI understands and answers our questions properly?

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David Dieruf
David Dieruf
AI Developer Advocate

What is Prompt Engineering?

Prompt engineering refers to the process of crafting well-defined and structured input queries or prompts for artificial intelligence models. This allows them to produce desired outputs or responses and fine-tune the behavior of these models for specific tasks and applications.

If your first interaction with a Large Language Model like GPT was using ChatGPT, then you might be inclined to think of prompt engineering as a question-and-answer relationship. Ask the model a question and get an answer. In fact AI models don’t technically answer questions, they complete thoughts. Prompting a model with “It’s a lovely day.” versus “Is it a lovely day?” will get different responses but not because one is a question and the other an opinion. To complete a thought, a model tries to find the (statistically) best-fitting next set of words. Then the next set of words after that, and so on. The response is called a “completion” because the model is trying to complete the thought. Punctuation doesn't have much influence.

You want to give a model just the right amount of information to achieve the desired completion. Too much context and it will have a hard time finding possible answers. Too little context and the answer will be very broad. The art of prompt engineering is finding that balance so the model consistently completes thoughts.

One option is to just start writing a story about what you’re looking for. Obviously that's going to be wordy and probably not a good use of time. Most public LLMs either charge or limit the length a prompt can be. So your prompt needs to get to the point quickly!

How does Prompt Engineering Work? A Step-by-step Process

Prompt engineering is a systematic process, unfolding in several distinct steps, to optimize communication with AI models. Here's a structured approach:

1. Problem Analysis

In prompt engineering, the first crucial step is thoroughly understanding the problem. This involves not only identifying what you want the AI model to do but also grasping the complexities and nuances of the task. A deep dive into the task helps in foreseeing how the model might interpret different prompts, which is essential for crafting effective prompts. For example, in a text generation task, understanding whether the desired output is a story, an article, or a poem is vital for guiding the AI's language and style.

2. Crafting the Initial Prompt

Once the problem is clearly defined and understood, the next step is to craft the initial prompt. This is a nuanced task where the prompt is formulated to provide clear and direct instructions to the AI model. The prompt serves as a roadmap for the AI, steering it towards the desired output. The craftsmanship here lies in balancing the need for specificity (to guide the AI accurately) with the need for openness (to allow the AI to generate creative and diverse responses).

3. Model Response Evaluation

After deploying the initial prompt, the next step involves evaluating the AI model's response. This stage is critical to assess whether the AI's output aligns with the expectations set in the prompt. It's a process of determining the effectiveness of the prompt and the AI's interpretive capacity. If the output deviates from the desired goal, it’s essential to identify why and how the AI misinterpreted the prompt, which could be due to a lack of clarity, insufficient context, or the complexity of the task.

4. Iterative Refinement

Based on the evaluation, the prompt is then refined. This stage is iterative and may require several rounds of adjustments. The refinement process involves altering the language of the prompt, adding more context, or restructuring the query to make it more explicit. The goal is to enhance the prompt in a way that it guides the AI more effectively towards the desired outcome. Each iteration brings the prompt closer to an optimal state where the AI's response aligns perfectly with the task's objectives.

5. Testing Across Models

An essential step in prompt engineering is testing the prompt across different AI models. This step helps in understanding the versatility and adaptability of the prompt. Different models, due to their unique training and structures, may interpret the same prompt in varied ways. Testing across models ensures that the prompt is robust and effective in diverse AI environments, leading to more reliable and generalizable results.

6. Scaling and Automation

The final step involves scaling and automating the prompt. Once a prompt is refined to a point where it consistently produces desirable results, it can be scaled to address broader contexts or automated for efficiency. Scaling might involve adapting the prompt for related tasks or automating the generation process for high-volume tasks. This step marks the transition from development to deployment, where the prompt is utilized in practical, real-world applications.

Why is Prompt Engineering Important?

Prompt engineering stands as a cornerstone in the effective utilization of AI and machine learning technologies. Its significance lies in its ability to fine-tune the communication between humans and AI models. By crafting precise and context-aware prompts, we significantly enhance the AI's ability to understand and respond to complex queries. This clarity in interaction is crucial in sectors where the accuracy and relevance of AI responses are paramount, such as healthcare diagnostics, financial forecasting, and legal advisement.

Furthermore, prompt engineering plays a pivotal role in expanding the adaptability and functionality of AI across various domains. It equips AI models to tackle domain-specific challenges, understand nuanced requests, and generate outputs that are not only accurate but also contextually relevant. This aspect of AI technology is especially vital in areas like content creation, customer service, and research, where the nuances of human language and intent need to be accurately captured and responded to.

What is Generative AI and How Does it Relate to Prompt Engineering?

Generative AI refers to artificial intelligence (AI) models that create new content, ranging from text and images to music and code, based on their training data.  This type of AI goes beyond mere data analysis and extends into the realm of creation, synthesizing text, images, music, and even code. The ability of generative AI to create novel content makes it an invaluable tool in various fields, from artistic endeavors to technical problem-solving.

The relationship between generative AI and prompt engineering is deeply intertwined. Prompt engineering is the mechanism through which users communicate with generative AI systems, guiding them to produce outcomes that meet specific criteria or objectives. Effective prompt engineering harnesses the creative and generative capabilities of AI, channeling them in ways that align with the user's goals. For instance, in content creation, a well-crafted prompt can lead the AI to produce a piece of writing with a certain tone, style, or format. In technical fields, prompts can direct the AI to develop solutions to specific problems or to generate code with certain functionalities. This synergy emphasizes the critical role of prompt engineering in maximizing the utility and effectiveness of generative AI technologies, making it an essential skill in the era of advanced AI.

Alien World Image
Prompt: A Science Fiction representation of an alien world

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What are Prompt Engineering Techniques?

There are various techniques you can use to help craft a prompt. As you can imagine the list is always expanding. Here are a few ideas:

Chain of thought

Instead of allowing any kind of completion, say you wanted a model to provide every completion using a specific pattern. You can provide a few “thoughts” ahead of the actual question in the prompt to influence how the model will respond. For example, let’s use a simple sentiment completion.

Goal: Determined the sentiment of a statement about the weather

Your prompt:

  • 1
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Complete the statement with a sentiment of sad, fearful, happy, joyous, or excited.

Statement: Rain storms make me cry
Sentiment: sad

Statement: Tornados scare me
Sentiment: fearful

Statement: Lighting is exciting


The model will complete with “excited”.

In the previous prompt we infrared the model that if could only respond with certain sentiment words. We also provided examples of patterns that we want the completion to follow. This influenced the model to respond in a specific way.


In a more advanced example, say you are building a customer service chatbot. In this case you want to be very guarded about how and with what information the model is allowed to respond with. You don’t want to send your customers to your competitors for example and you don’t want to include personally identifiable information. In this case, your prompts could introduce the idea of roles using an example customer service conversation.

Goal: Help a customer find an answer to their question about our products.

Your prompt:

  • You are a customer service representative at a company that makes widgets for teens.
  • Your answers are friendly and attempt to direct someone to the product’s documentation.
  • If you don’t know the answer, then you direct the customer to the company's support form where they can open a ticket.

Customer service rep: Hi there! How can I help you?

Customer: Where can I find more information about the features of your widgets?

Customer service rep: Please visit the features off our documentation to learn more about the widgets.


Customer service rep: Hi there! How can I help you?

Customer: My widget has broken. Will you replace it?

Customer service rep: There’s a chance. Please review our replacement policy in our documentation.

Customer: I already did that, will you replace it?!

Customer service rep: We’ll need a little more information about what you purchased and when. Please answer the question on our support form and submit. Someone will follow up shortly.


Customer: Where can I find warranty information?


Thank you for asking about the warranty information. You can find detailed information about our product warranties in the warranty section of our documentation. If you have any specific questions or concerns regarding the warranty, feel free to ask, and I'll be glad to assist you further.

The model now has an idea of a typical customer service conversation and will respond appropriately. If it’s ever asked a question that it can’t find a good completion for it will default to directing someone to opening a ticket.

Generative Knowledge

Continuing with the previous example of building a customer service chatbot, let’s complicate things. Let’s attempt to build a customer service bot for an airline. Imagine the possibilities! It would need context about the customer’s flight, all other flights, upgrade policies, the weather between the customer’s origin and destination, and many other things.

Goal: Help a customer while traveling with questions about their flight and upgrades.

Your prompt:

  • You are a customer service representative for an airline.
  • Your answers are friendly and specific to each customer’s travel itinerary.
  • The current customer is flying from Louisville, Kentucky, USA to Chicago, Illinois, USA.
  • The flight has been delayed by 30 minutes but should arrive at its destination on time.
  • There is a large rainstorm that is affecting the flight path and it’s unknown how it could delay the flight.
  • There are 3 alternate flights that have multiple stops in other cities.
  • If the customer is interested in any of the alternate flights, direct them to a service desk at the airport.

Customer: Am I going to make it to Chicago on time?


Hello! I understand your concern about making it to Chicago on time. Due to a rainstorm along the flight path, our current flight has been delayed by 30 minutes. However, we anticipate arriving at our destination on time despite the delay. Rest assured, our team is closely monitoring the weather conditions to ensure a safe and efficient journey.

If you prefer to explore alternative options, we do have three flights available with multiple stops in other cities. For more details and assistance with rebooking, I recommend heading to our service desk at the airport. Our staff there will be more than happy to help you find the best option that suits your travel needs.

If you have any other questions or need further assistance, feel free to ask. Thank you for your understanding, and we'll do our best to ensure a smooth travel experience for you.

The prompt have the model enough context to be helpful to that specific customer’s question. Obviously this example prompt could be expanded quite a bit, but it illustrates how a model can generate knowledge with the right context.

The Role of Semantic Embeddings and Vector Databases in Prompt Engineering

Building a prompt is only part of the prompt engineering role. Consider the previous generative knowledge example. There was quite a bit of real-time information in that prompt that the model woundn’t know anything about. Other data sources would have to be queried ahead of assembling the prompt to have this knowledge. These queries introduce complexity and latency in the time it takes to get a result. If you want to find the slowest way to query data from a database, include a bunch of “joins” and compare text to text. It’s slow, if you’ve never tried that. Ideally you want queries to compare numbers. Computers are very efficient at this.

For a Prompt Engineer, almost all work revolves around natural language. That is a fancy way of referring to clear text written in a language like English. Most of a Prompt Engineer's time is spent creating a prompt template and figuring out the queries to run that fill the template with context. The challenge is, that the queries are going to be running on many different size database tables. So a Prompt Engineer needs to find ways of ensuring a very speedy query so that the prompt can be built and sent on to the model.

Consider the text “Mary had a little lamb”. This is unstructured data because it’s just a blob of bits. Its type (string) is the simplest, loosest way of storing information. Running a query like “select * from a-table where text like ‘little lamb’” is going to be very inefficient. If you’re using that to build a prompt, your users are going to be waiting… a while. To speed things up you want to convert that unstructured text to a known structure, ideally as numbers. This would be a significantly faster query. Semantic embeddings are the conversion of unstructured text to structured values. The act of embedding text is to apply some known algorithm to a string of text and output a collection of numbers that represent that text. The collection of numbers are known as vectors. Referring to text as an “embedding” means it has been converted into numerical values. The chosen algorithm that does the conversion, makes sure all vectors follow the same semantics. As long as all the text is embedded using the same semantics, it is all searchable.

After converting the text to numbers you need to store them, but not in the traditional way. Traditionally you store data in a table that follows a schema. That schema declares what types of data are allowed in each column as well as other limitations. If you were to query that table looking for similar data to some criteria, you would “select something from a-table where this=that && another is like those”. This is a comparison query. The result would be rows from the table that match that criteria. When you search on a vector database you are using a (potentially) large collection of numbers to search an ever larger collection of numbers. Efficiency is key during a query like this. A vector database doesn’t do a comparison, instead it does a nearest-neighbor search. That means to try to find collections of vectors that very closely match the provided collection of vectors. The result is a fast query over a lot of data in a very efficient way. The returned vectors can then be converted back to text and included on the prompt template.

When speaking about embedding text, there are two sides to the story. You have new data constantly being vectorized and saved to the vector database while at the same time queries to the vector database are being performed. The result is a very fast query on large amounts of data. This helps balance putting the right context in a prompt so the model can provide meaningful completions. In the generative knowledge example above the original prompt would actually have placeholders in it to hold query results.

An example of a templated prompt:

  • You are a customer service representative for an airline.
  • Your answers are friendly and specific to each customer’s travel itinerary.
  • The current customer is flying from {{ origin }} to {{ destination}}. {{ flightStatusChanges }}.
  • There is {{ latestWeatherEvent }} that is affecting the flight path and it’s unknown how it could delay the flight.
  • There are {{ numAlternateFLlghtsToOrigin }} alternate flights that have multiple stops in other cities.
  • If the customer is interested in any of the alternate flights, direct them to a service desk at the airport.

Best Practices for Effective Prompt Engineering

Prompt engineering is a mix of art and science. The art is creating a prompt that includes just the right amount of contextual information and instructs a model in just the right way to provide consistent completions. The science is creating an efficient system of queryable data to help build the context of information. As you can imagine, the role of prompt engineering is not something that you will instantly learn by reading books. Every prompt acts a little differently. Every model does completions differently. An effective prompt engineer has a background in data querying and is good at combining human-computer interaction.

To excel in prompt engineering, embracing a set of best practices is key. These practices, honed through experience and experimentation, guide prompt engineers in creating effective, precise prompts that resonate well with AI models. Here are specific best practices that have proven to be effective in the field of prompt engineering:

Be Clear and Specific

Clarity and specificity in prompts are crucial. They guide the AI to understand exactly what is required, reducing the likelihood of irrelevant or off-target responses. A clear and specific prompt leaves little room for misinterpretation, leading to more accurate and useful outputs.

Use Examples and Context

Incorporating examples and context in your prompts can significantly improve the AI's performance. Examples serve as guides, showing the AI the kind of output you're expecting, while context provides the background information needed for the AI to understand the prompt more holistically.

Experiment with Phrasing

Different phrasings can elicit different responses from AI models. Experimenting with various ways of wording your prompts can help you discover the most effective way to communicate your request to the AI, leading to better results.

Start Simple, Iterate Complexity

Begin with simple prompts to establish a baseline understanding. Once the AI consistently produces satisfactory responses, gradually increase the complexity of your prompts. This iterative approach helps in fine-tuning the AI's responses over time.

Control Ambiguity

While some ambiguity can spark creativity, too much can lead to inconsistent and unpredictable responses. It's important to strike a balance, providing enough detail to guide the AI but not so much that it stifles its creative potential.

Combine Multiple Prompts

Using a combination of prompts can be effective, especially for complex tasks. This approach allows you to provide the AI with a more comprehensive set of instructions and context, potentially leading to more accurate and nuanced responses.

Document Successful Prompts

Keeping a record of prompts that have led to successful outcomes is invaluable. This documentation can serve as a reference for future prompt engineering efforts, helping to identify patterns and strategies that work well.

Here are a few additional external resource to help understand prompt engineering best practices:

Exploring the Role of an AI Prompt Engineer

The AI Prompt Engineer occupies a unique and critical position in the field of artificial intelligence. They are responsible for bridging the gap between human intention and machine understanding. This role demands a deep comprehension of AI model mechanics and an ability to predict how these models will interpret and respond to various prompts. The primary task is to develop prompts that guide AI systems to generate accurate, relevant, and contextually appropriate responses.

In their daily work, AI Prompt Engineers engage in a cycle of designing, testing, and refining prompts. This iterative process requires a blend of creativity and analytical skills, as each prompt must be tailored to the specific needs of a task while also considering the AI model's capabilities and limitations. The engineers must be adept at problem-solving, often needing to adjust their approach based on the AI's responses and performance.

Challenges and Limitations of Prompt Engineering

While prompt engineering offers numerous advantages, it also presents specific challenges that must be navigated carefully. These challenges range from technical limitations to ethical considerations, each playing a critical role in the effectiveness and responsibility of AI interactions. Here is a list of key challenges faced in prompt engineering:

Unpredictability in AI Responses

AI models can sometimes produce unexpected or irrelevant outputs. This requires prompt engineers to continuously test and refine their prompts to align the AI's responses with the intended goals.

Biases in AI Models

AI systems may inherit biases from their training data, which can skew their responses. Prompt engineers must be vigilant and craft prompts that minimize these biases and ensure fairness and objectivity.

Complex Language and Context Understanding

AI models may struggle with understanding and interpreting complex, nuanced language or context. This limitation challenges prompt engineers to develop prompts that are both clear to the AI and effective in eliciting the desired response.

Ethical Considerations

There is a need to ethically guide AI responses, especially in sensitive areas. Prompt engineers must consider the ethical implications of their prompts to avoid harmful or unethical AI outputs.

Dependency on AI Model's Capabilities

The effectiveness of prompt engineering is inherently tied to the capabilities of the underlying AI model. Limitations in the AI model's understanding or processing abilities can constrain the scope of successful prompt engineering.

Adapting to Rapid Technological Changes

The fast-evolving nature of AI technology means that prompt engineering techniques and best practices must continuously adapt, posing a challenge for prompt engineers to stay current.

Prompt Engineering Use Cases and Applications

Prompt engineering finds its applications in a diverse array of fields, each leveraging the technology to enhance efficiency and innovation.

Content Creation and Copywriting

In content creation and copywriting, prompt engineering guides AI to produce diverse forms of written content. From blog posts to marketing copy, the precise formulation of prompts ensures content is tailored to specific tones, styles, and topics, aligning with the intended audience and objectives.

Data Analysis and Reporting

In data analysis and reporting, prompt engineering helps in extracting meaningful insights from complex datasets. It guides AI in summarizing data, generating reports, and even identifying trends, making data more accessible and understandable.

Customer Service Automation

For customer service, prompt engineering enables the creation of intelligent chatbots and virtual assistants. These AI systems can provide instant, accurate responses to customer queries, improving the efficiency and quality of customer interactions.

Language Translation and Localization

In translation and localization, prompt engineering allows AI to accurately translate text between languages while considering cultural nuances. This application is crucial in global communication and content adaptation for different regions.

Educational Tools and E-Learning

In education, prompt engineering is used to develop AI-driven tutoring systems and educational content. AI can provide personalized learning experiences, answer student queries, and even assist in grading and feedback.

Entertainment and Creative Arts

In entertainment and creative arts, prompt engineering aids in the generation of music, scripts, and art. It allows creators to experiment with new forms of expression, pushing the boundaries of creativity.

The future of prompt engineering is poised for significant advancements and broader applications. We anticipate a deeper integration of AI into various industries, where prompt engineering will play a crucial role in customizing AI outputs for specific tasks. Advancements in AI's understanding of natural language and context will likely enhance the effectiveness of prompts, making them more intuitive and less reliant on technical phrasing. Additionally, the evolution of AI models may lead to a new paradigm where prompts are dynamically generated and adapted by the AI itself, leading to more sophisticated and autonomous interactions. These developments are expected to not only streamline human-AI interactions but also open up new possibilities for innovative applications across different sectors.

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Prompt Engineering FAQs

What is prompt engineering?

Prompt engineering is the art and science of crafting questions and providing the right amount of context to AI models to elicit desired outputs. It's akin to teaching, where the phrasing of questions and the context given significantly impacts the responses received from the AI models, aiming to provide a clearer understanding and better responses to the prompts given​​.

Why is prompt engineering important?

It is crucial as it ensures that AI models understand the context and provide relevant and accurate responses. It enhances the quality of interaction with the AI, minimizing the chances of receiving confusing or irrelevant answers, thus making the interaction with AI models more fruitful and meaningful​​.

How does prompt engineering relate to large language models?

Prompt engineering is particularly vital when interacting with large language models (LLMs), as it helps in providing the necessary context for the models to complete thoughts in a coherent and relevant manner. LLMs are stateless and start with no context, thus the way questions are engineered significantly impacts the quality and relevance of the responses obtained​​.

What challenges are associated with prompt engineering?

One of the primary challenges associated with prompt engineering is finding the right balance of information to provide as context. Too much context can overwhelm the model, and too little can lead to very broad or irrelevant responses. Achieving that balance ensures the model completes thoughts in a consistent and meaningful way, making prompt engineering a nuanced and crucial aspect of interacting with AI models​​.

How does context impact the effectiveness of prompt engineering?

Context is a cornerstone in prompt engineering as it significantly impacts the accuracy and relevance of responses from AI models. Providing the right context ensures that the AI model has enough information to generate a response that is aligned with the intent of the query, thereby improving the overall quality of AI interactions and achieving the desired output​​.

What are some techniques in prompt engineering?

Techniques in prompt engineering include crafting a chain of thought or establishing a conversation scenario to guide the AI model's responses in a desired direction. These techniques help in setting the stage for the AI to understand the kind of responses desired, thereby influencing how the model will respond to the prompts, making the interaction more focused and productive​​.

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