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The ability to describe how an AI system arrived at a particular output or decision in terms that humans can understand. It is legally relevant in some contexts: GDPR Articles 13 to 15 require meaningful information about the logic involved in automated decisions covered by Article 22, and Article 86 of the EU AI Act gives affected persons a right to an explanation of certain decisions based on high-risk AI. It is also operationally important for debugging, auditing, and building user trust. There is a spectrum from full transparency (the model's reasoning is completely legible) to post-hoc explanation (a separate method generates an explanation after the fact). Most large language models are not inherently explainable.
Why this matters for your team
If you use AI to make decisions that significantly affect individuals — credit, hiring, pricing, content moderation — you may have a legal obligation to explain those decisions. GDPR Article 22 and multiple US state laws require explainability for automated decisions. Check whether your AI model can provide it before deploying.