1Z0-1122-26 · Domain 4 of 7

1Z0-1122-26 Domain 4: Intro to Generative AI & LLMs

This section covers what makes a model generative, how large language models predict tokens, how transformer attention works, how prompts and instruction tuning shape behaviour, and when fine-tuning a model is worth the cost.

Exam weight estimate
Not published
Official objectives estimate
5
Estimated questions estimate
~6
Suggested study time estimate
7–9 hrs

About 12 min read Reviewed October 2026

Overview

Domain 4 is the conceptual core of the generative AI material. It begins with the difference between generative models, which learn the distribution of their training data and can produce new samples, and discriminative models, which only learn to separate classes. It then explains large language models: text is split into tokens, the model assigns a probability to every possible next token, and a decoding strategy picks one at a time.

You need the transformer architecture at a high level, including self-attention, encoders, decoders and why transformers process tokens in parallel. The section closes with ways to steer a model: prompt engineering techniques such as few-shot and chain-of-thought prompting, instruction tuning, and fine-tuning approaches including parameter-efficient methods. Hallucination and its mitigations also come up here.

How it's tested

Questions test whether you can explain LLM behaviour and pick the right technique for a goal. Typical items ask what a parameter does, which transformer type fits a task, or whether prompting, retrieval or fine-tuning best solves a stated problem. Cost and effort are often the deciding clue.

  • Explain a decoding setting

    You predict how temperature or top p changes output, or why greedy decoding gives repetitive but stable text.

  • Pick the architecture

    Embedding and classification tasks point to encoders, text generation to decoders, and translation to encoder-decoder models.

  • Prompt, retrieve or tune

    A goal is stated and you choose prompt engineering, retrieval-augmented generation or fine-tuning as the lowest-effort fix.

Reasoning it through

A legal team finds that a model answers questions about its contracts with confident but invented clauses. The problem is missing knowledge, not style, so fine-tuning on writing tone would not help. Retrieval-augmented generation, which fetches relevant contract passages and adds them to the prompt, grounds the answer in real text and reduces hallucination without retraining. That is the expected choice.

Objectives 5

Official objectives from the Oracle outline, in outline order.

4.1 Explain generative AI fundamentalsHow generative models differ from predictive ones.
What it means
Generative AI refers to models that learn patterns in training data well enough to create new content: text, images, audio, code or video. Discriminative models, by contrast, learn boundaries between classes and output a label or score.
What to understand
Generative models learn an approximation of the data distribution, so sampling from them yields new examples that resemble the training data. Text generation uses transformer LLMs, while image generation often uses diffusion models that learn to remove noise step by step. Business uses include drafting, summarising, chat assistants and code generation. Risks include hallucination, bias copied from training data and intellectual property concerns.
How it shows up
Expect a question that separates a generative use case from a classification one.
Common confusion
Calling any deep learning model generative, even when its only output is a class label.
4.2 Explain LLM basicsTokens, next-token prediction, decoding and hallucination.
What it means
A large language model is a transformer trained on very large text corpora to predict the next token. A token is a word or word fragment. Generation repeats next-token prediction until a stop condition or the token limit is reached.
What to understand
The model outputs a probability distribution over its vocabulary at each step. Greedy decoding always picks the most likely token, which is stable but can repeat. Sampling picks according to the probabilities, and temperature reshapes them: low values sharpen the distribution for predictable output, high values flatten it for variety. Top k and top p restrict choices to the most likely tokens. The context window caps how many tokens the model can consider at once. Hallucination is fluent but false output.
How it shows up
You may be asked what raising temperature does or why an LLM can state false facts confidently.
Common confusion
Thinking temperature changes what the model knows; it only changes how tokens are sampled.
4.3 Explain transformers fundamentalsSelf-attention and encoder, decoder and encoder-decoder designs.
What it means
Transformers process all tokens of an input together and use self-attention to let each token weigh the relevance of every other token. This captures long-range context and allows parallel training, which recurrent networks could not do efficiently.
What to understand
Because tokens are processed together, positional encoding adds word-order information. Encoder-only models, such as BERT-style models, build contextual representations used for embeddings, search and classification. Decoder-only models generate text token by token and power most chat LLMs. Encoder-decoder models read an input sequence and produce a different output sequence, a natural fit for translation and summarisation.
How it shows up
Questions ask which transformer type suits embeddings, chat or translation, or what attention provides.
Common confusion
Assuming every LLM uses both an encoder and a decoder; most chat models are decoder-only.
4.4 Explain prompt engineering and instruction tuningShaping outputs through input design and training on instructions.
What it means
Prompt engineering is designing the input text so the model produces the desired output without changing its weights. Instruction tuning is a training stage in which a model learns from many instruction and response pairs so it follows requests well.
What to understand
Zero-shot prompting gives only the task, few-shot prompting adds worked examples in the prompt, and this in-context learning needs no training. Chain-of-thought prompting asks the model to reason step by step, which helps on multi-step problems. Clear roles, formats and constraints improve consistency. Instruction tuning, often followed by reinforcement learning from human feedback, is why chat models respond to plain requests. Prompt injection is a risk where crafted input overrides the intended instructions.
How it shows up
Expect to distinguish few-shot prompting from fine-tuning, or to identify chain-of-thought prompting.
Common confusion
Believing few-shot examples permanently teach the model; they only affect the current request.
4.5 Explain LLM fine-tuningAdapting a pretrained model with additional training.
What it means
Fine-tuning continues training a pretrained model on a smaller, task-specific dataset so it adapts to a domain, style or format. It changes model weights, unlike prompting or retrieval.
What to understand
Full fine-tuning updates all parameters and is costly in compute and storage. Parameter-efficient fine-tuning updates only a small set of added or selected weights; LoRA and T-Few are examples, and OCI Generative AI offers such methods on dedicated AI clusters. Fine-tuning suits consistent tone, specialised formats or narrow tasks. For knowledge that changes often, retrieval-augmented generation is usually cheaper and easier to keep current. Fine-tuning needs good-quality labelled examples.
How it shows up
A scenario weighs fine-tuning against prompting or RAG and asks for the most cost-effective approach.
Common confusion
Treating fine-tuning as the fix for missing or frequently changing facts.

High-yield concepts

The terms, rules and formulas this domain turns into questions most often.

  • Token

    A word or sub-word unit the model reads and writes.

    Remember
    Limits and pricing are counted in tokens.
    Tested as
    Context and cost questions.
    Trap
    Equating one token with one word.
  • Next-token prediction

    LLMs generate by repeatedly predicting the next token.

    Remember
    Output is probabilistic.
    Tested as
    Explaining LLM behaviour.
    Trap
    Thinking the model retrieves stored sentences.
  • Temperature

    Scales token probabilities before sampling.

    Remember
    Low is focused, high is varied.
    Tested as
    Parameter questions.
    Trap
    Thinking high temperature improves accuracy.
  • Top k and top p

    Limit sampling to the k most likely tokens or a cumulative probability mass.

    Remember
    Both narrow the candidate pool.
    Tested as
    Parameter questions.
    Trap
    Mixing up count-based k with probability-based p.
  • Context window

    Maximum tokens the model can attend to at once.

    Remember
    Includes prompt and response.
    Tested as
    Long document scenarios.
    Trap
    Assuming it only counts the response.
  • Hallucination

    Fluent output that is factually wrong.

    Remember
    Grounding with retrieval reduces it.
    Tested as
    Risk and mitigation items.
    Trap
    Believing lower temperature eliminates it.
  • Self-attention

    Each token weighs every other token for context.

    Remember
    Enables parallel processing and long-range context.
    Tested as
    Transformer questions.
    Trap
    Linking it to RNN hidden state.
  • Encoder vs decoder

    Encoders build representations; decoders generate text.

    Remember
    Embeddings use encoders; chat uses decoders.
    Tested as
    Architecture choice items.
    Trap
    Choosing a decoder for semantic search embeddings.
  • Few-shot prompting

    Including examples in the prompt.

    Remember
    No weights change.
    Tested as
    Prompt versus tuning items.
    Trap
    Calling it fine-tuning.
  • Chain-of-thought

    Prompting the model to show intermediate reasoning steps.

    Remember
    Helps multi-step problems.
    Tested as
    Technique identification.
    Trap
    Thinking it guarantees correct answers.
  • Instruction tuning

    Training on instruction and response pairs.

    Remember
    Makes models follow plain requests.
    Tested as
    Why chat models behave as they do.
    Trap
    Confusing it with writing better prompts.
  • Parameter-efficient fine-tuning

    Updating a small subset of weights, for example LoRA or T-Few.

    Remember
    Cheaper than full fine-tuning.
    Tested as
    Cost-focused tuning items.
    Trap
    Assuming it retrains the entire model.

Side by side

Concepts candidates mix up, compared on the point that decides the answer.

Ways to adapt an LLM

ConceptMeaningKey differenceCommon trap
Prompt engineering Change the input text. No training, instant, cheapest. Expecting it to add large new knowledge bases.
Retrieval-augmented generation Add retrieved documents to the prompt. Supplies current facts without retraining. Assuming it changes model weights.
Fine-tuning Further train on task data. Changes weights for style, format or narrow skills. Using it for facts that change weekly.

Transformer families

ConceptMeaningKey differenceCommon trap
Encoder-only Produces contextual vectors. Suited to embeddings and classification. Using it for free-form chat.
Decoder-only Generates tokens left to right. Basis of most chat LLMs. Expecting it to output embeddings by default.
Encoder-decoder Maps one sequence to another. Natural fit for translation and summarisation. Thinking every LLM needs both parts.

Decoding settings

ConceptMeaningKey differenceCommon trap
Greedy Always takes the top token. Deterministic, can repeat. Assuming it is the most creative.
High temperature Flattens probabilities. More varied, more risk of errors. Using it for factual extraction.
Low temperature Sharpens probabilities. More predictable output. Believing it stops hallucination entirely.

Exam traps

Each trap is an answer that looks right. Learn the clue that should change your mind.

  1. Temperature and accuracy

    What candidates pick
    Raise temperature for more accurate answers
    Why it looks right
    Higher settings sound more powerful.
    Why it's wrong
    Temperature controls randomness in token selection; higher values increase variety and the chance of drifting off-fact.

    Clue to watch for Words like creative versus consistent.

  2. Fine-tune for fresh facts

    What candidates pick
    Fine-tune the model weekly
    Why it looks right
    Training sounds like teaching new information.
    Why it's wrong
    Retraining is slow and costly for changing data, while retrieval adds current documents at query time.

    Clue to watch for Content that updates often.

  3. Few-shot equals training

    What candidates pick
    Few-shot learning changes weights
    Why it looks right
    The word learning suggests training.
    Why it's wrong
    Examples in the prompt guide only that request; the model parameters stay exactly the same.

    Clue to watch for Examples placed inside the prompt.

  4. RNN memory in transformers

    What candidates pick
    Transformers pass a hidden state step by step
    Why it looks right
    Both handle sequences.
    Why it's wrong
    Transformers use self-attention over all tokens at once rather than a recurrent hidden state.

    Clue to watch for Question about parallel processing.

  5. Bigger context fixes hallucination

    What candidates pick
    Increase the context window
    Why it looks right
    More room seems to mean more knowledge.
    Why it's wrong
    A larger window only helps if relevant facts are actually supplied; it does not add knowledge by itself.

    Clue to watch for Model invents facts it was never given.

  6. Generative for classification

    What candidates pick
    Use a generative model to label emails
    Why it looks right
    Generative AI is the topical choice.
    Why it's wrong
    If the output is only a class, a discriminative classifier is the natural fit; generation is not required.

    Clue to watch for Output described as a category.

Answer framework

Use this sequence when a Domain 4 question asks how to get better output from an LLM.

  1. Diagnose the problem as one of format or style, missing or outdated knowledge, or poor reasoning on multi-step tasks, since each has a different first remedy.
  2. Try prompt engineering first for format, tone and reasoning issues, using clear instructions, examples or chain-of-thought.
  3. Choose retrieval-augmented generation when the model lacks private or current facts, so answers are grounded in supplied documents.
  4. Choose fine-tuning only when consistent behaviour or a specialised style is needed and good labelled examples exist, accepting the extra cost of training and hosting a custom model.
  5. Adjust decoding settings last: lower temperature or top p for consistency, raise them when varied creative output is wanted, and remember these settings never add knowledge the model lacks.

Practice question

A support team wants its LLM to always reply in a fixed three-part format. Adding the format description and two example replies to the prompt already works. What is the main advantage of keeping this approach instead of fine-tuning?

Choose one answer

Want more like this? The 1Z0-1122-26 practice test has questions for every domain.

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Study strategy

Allow seven to nine hours, the largest block among the conceptual sections. Watch the generative AI and LLM lessons in Oracle's AI Foundations course and take notes in four groups: what an LLM is, how it decodes, how the transformer is built, and how to adapt it.

Get hands-on if you can. Open any chat model, or the OCI Generative AI playground if you have tenancy access, and run the same prompt at temperature 0.1 and 0.9. Then try zero-shot versus few-shot versions of a formatting task. Seeing the difference fixes these ideas better than reading definitions.

Next, build a three-row table comparing prompt engineering, RAG and fine-tuning by cost, speed, whether weights change and what problem each solves. Most scenario questions in this section are answered from that table.

Finish with practice questions, focusing on parameter behaviour and transformer family choices. Before moving on, note which of these concepts Oracle exposes in its own service, such as temperature, embeddings and dedicated clusters, to prepare for Domain 6.

FAQ

How heavily is Intro to Generative AI & LLMs weighted?

Oracle publishes no weights for 1Z0-1122-26. Secondary estimates place this generative AI section at about six of the 40 questions, and its concepts also support Domain 6.

Do I need to know specific model names?

Not for this section. It tests concepts. Model families offered on OCI matter more in Domain 6.

Is RAG part of this section or Domain 6?

Both touch it. Here you learn why grounding reduces hallucination; Domain 6 covers how Oracle implements retrieval with Vector Search and Select AI.

What does instruction tuning add?

It trains a base model on instruction and answer pairs so it follows plain requests, which is why chat models respond helpfully.

Will the exam ask about diffusion models?

Possibly at a recognition level: diffusion models generate images by learning to remove noise. Text generation questions are more common.

What is the safest default when choosing an adaptation method?

Start with prompting, add retrieval for missing knowledge, and fine-tune only when style or task consistency still falls short.

Other Artificial Intelligence & Machine Learning certifications

Where the same subject shows up in other exams. Cards marked "Same subject" open the matching domain.

Test your Domain 4 knowledge

You have studied LLM behaviour, transformers, prompting and fine-tuning. Check that you can pick the right technique under time pressure.

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