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Building a simple chatbot application with generative AI requires understanding the underlying technologies and potential problems that can arise. The application uses an OpenAI GPT model, a vector database, and an orchestration framework to provide informed responses to user queries. However, this technology also introduces complexities such as nondeterministic behavior, hallucinations, and high resource usage. To mitigate these issues, observability tools like New Relic can be used to gain insights into the application's performance, user engagement, and costs. By monitoring the chatbot's responses, developers can identify areas for optimization and fine-tune the knowledge base of the AI to provide more meaningful interactions with users.