Build RAG Chatbot with Haystack, Haystack In-memory store, OpenAI GPT-o3-mini, and Optimum mpnet-base-v2

Introduction to RAG

Retrieval-Augmented Generation (RAG) is a game-changer for GenAI applications, especially in conversational AI. It combines the power of pre-trained large language models (LLMs) like OpenAI’s GPT with external knowledge sources stored in vector databases such as Milvus and Zilliz Cloud, allowing for more accurate, contextually relevant, and up-to-date response generation. A RAG pipeline usually consists of four basic components: a vector database, an embedding model, an LLM, and a framework.

Key Components We'll Use for This RAG Chatbot

This tutorial shows you how to build a simple RAG chatbot in Python using the following components:

Haystack: An open-source Python framework designed for building production-ready NLP applications, particularly question answering and semantic search systems. Haystack excels at retrieving information from large document collections through its modular architecture that combines retrieval and reader components. Ideal for developers creating search applications, chatbots, and knowledge management systems that require efficient document processing and accurate information extraction from unstructured text.
Haystack in-memory store: a very simple, in-memory document store with no extra services or dependencies. It is great for experimenting with Haystack, and we do not recommend using it for production. If you want a much more scalable solution for your apps or even enterprise projects, we recommend using Zilliz Cloud, which is a fully managed vector database service built on the open-source Milvusand offers a free tier supporting up to 1 million vectors.)
OpenAI GPT-o3-mini: A lightweight, efficient language model optimized for rapid text generation and comprehension. Designed to balance performance with resource efficiency, it excels in applications requiring quick responses and lower computational costs, such as mobile apps, customer service chatbots, and real-time content moderation. Ideal for developers seeking scalable AI solutions with minimal infrastructure demands.
Optimum mpnet-base-v2: A high-performance model designed for sentence-level tasks, Optimum mpnet-base-v2 is optimized for semantic textual similarity, classification, and retrieval applications. Its efficient architecture excels in both speed and accuracy, making it ideal for use cases in natural language understanding, search, and recommendation systems.

By the end of this tutorial, you’ll have a functional chatbot capable of answering questions based on a custom knowledge base.

Note: Since we may use proprietary models in our tutorials, make sure you have the required API key beforehand.

Step 1: Install and Set Up Haystack

import os
import requests

from haystack import Pipeline
from haystack.components.converters import MarkdownToDocument

from haystack.components.preprocessors import DocumentSplitter
from haystack.components.writers import DocumentWriter

Step 2: Install and Set Up OpenAI GPT-o3-mini

To use OpenAI models, you need to get an OpenAI API key. The Haystack integration with OpenAI models uses an OPENAI_API_KEY environment variable by default. Otherwise, you can pass an API key at initialization with api_key:

generator = OpenAIGenerator(api_key=Secret.from_token("<your-api-key>"), model="gpt-4o-mini")

Then, the generator component needs a prompt to operate, but you can pass any text generation parameters valid for the openai.ChatCompletion.create method directly to this component using the generation_kwargs parameter, both at initialization and to run() method. For more details on the parameters supported by the OpenAI API, refer to the OpenAI documentation.

Now let's install and set up OpenAI models.

from haystack.components.generators import OpenAIGenerator

generator = OpenAIGenerator(model="o3-mini", api_key=Secret.from_token("<your-api-key>"))

Step 3: Install and Set Up Optimum mpnet-base-v2

Haystack's OptimumTextEmbedder embeds text strings using models loaded with the HuggingFace Optimum library. It uses the ONNX runtime for high-speed inference. Similarly to other Embedders, this component allows adding prefixes (and suffixes) to include instructions. For more details, refer to the Optimum API Reference.

pip install optimum-haystack

from haystack_integrations.components.embedders.optimum import OptimumTextEmbedder
from haystack.dataclasses import Document
from haystack_integrations.components.embedders.optimum import OptimumDocumentEmbedder

text_embedder = OptimumTextEmbedder(model="sentence-transformers")
text_embedder.warm_up()

document_embedder = OptimumDocumentEmbedder(model="sentence-transformers/mpnet-base-v2")
document_embedder.warm_up()

Step 4: Install and Set Up Haystack In-memory store

from haystack.document_stores.in_memory import InMemoryDocumentStore
from haystack.components.retrievers import InMemoryEmbeddingRetriever

document_store = InMemoryDocumentStore()
retriever=InMemoryEmbeddingRetriever(document_store=document_store))

Step 5: Build a RAG Chatbot

Now that you’ve set up all components, let’s start to build a simple chatbot. We’ll use the Milvus introduction doc as a private knowledge base. You can replace it your own dataset to customize your RAG chatbot.

url = 'https://raw.githubusercontent.com/milvus-io/milvus-docs/refs/heads/v2.5.x/site/en/about/overview.md'
example_file = 'example_file.md'
response = requests.get(url)
with open(example_file, 'wb') as f:
    f.write(response.content)
file_paths = [example_file]  # You can replace it with your own file paths.

indexing_pipeline = Pipeline()
indexing_pipeline.add_component("converter", MarkdownToDocument())
indexing_pipeline.add_component("splitter", DocumentSplitter(split_by="sentence", split_length=2))
indexing_pipeline.add_component("embedder", document_embedder)
indexing_pipeline.add_component("writer", DocumentWriter(document_store))
indexing_pipeline.connect("converter", "splitter")
indexing_pipeline.connect("splitter", "embedder")
indexing_pipeline.connect("embedder", "writer")
indexing_pipeline.run({"converter": {"sources": file_paths}})

# print("Number of documents:", document_store.count_documents())
  
question = "What is Milvus?"  # You can replace it with your own question.

retrieval_pipeline = Pipeline()
retrieval_pipeline.add_component("embedder", text_embedder)
retrieval_pipeline.add_component("retriever", retriever)
retrieval_pipeline.connect("embedder", "retriever")

retrieval_results = retrieval_pipeline.run({"embedder": {"text": question}})

# for doc in retrieval_results["retriever"]["documents"]:
#     print(doc.content)
#     print("-" * 10)

from haystack.utils import Secret
from haystack.components.builders import PromptBuilder

retriever=InMemoryEmbeddingRetriever(document_store=document_store) 
 text_embedder = OptimumTextEmbedder(model="sentence-transformers")
text_embedder.warm_up()

prompt_template = """Answer the following query based on the provided context. If the context does
                     not include an answer, reply with 'I don't know'.\n
                     Query: {{query}}
                     Documents:
                     {% for doc in documents %}
                        {{ doc.content }}
                     {% endfor %}
                     Answer: 
                  """

rag_pipeline = Pipeline()
rag_pipeline.add_component("text_embedder", text_embedder)
rag_pipeline.add_component("retriever", retriever)
rag_pipeline.add_component("prompt_builder", PromptBuilder(template=prompt_template))
rag_pipeline.add_component("generator", generator)
rag_pipeline.connect("text_embedder.embedding", "retriever.query_embedding")
rag_pipeline.connect("retriever.documents", "prompt_builder.documents")
rag_pipeline.connect("prompt_builder", "generator")

results = rag_pipeline.run({"text_embedder": {"text": question}, "prompt_builder": {"query": question},})
print('RAG answer:\n', results["generator"]["replies"][0])

Optimization Tips

As you build your RAG system, optimization is key to ensuring peak performance and efficiency. While setting up the components is an essential first step, fine-tuning each one will help you create a solution that works even better and scales seamlessly. In this section, we’ll share some practical tips for optimizing all these components, giving you the edge to build smarter, faster, and more responsive RAG applications.

Haystack optimization tips

To optimize Haystack in a RAG setup, ensure you use an efficient retriever like FAISS or Milvus for scalable and fast similarity searches. Fine-tune your document store settings, such as indexing strategies and storage backends, to balance speed and accuracy. Use batch processing for embedding generation to reduce latency and optimize API calls. Leverage Haystack's pipeline caching to avoid redundant computations, especially for frequently queried documents. Tune your reader model by selecting a lightweight yet accurate transformer-based model like DistilBERT to speed up response times. Implement query rewriting or filtering techniques to enhance retrieval quality, ensuring the most relevant documents are retrieved for generation. Finally, monitor system performance with Haystack’s built-in evaluation tools to iteratively refine your setup based on real-world query performance.

Haystack in-memory store optimization tips

Haystack in-memory store is just a very simple, in-memory document store with no extra services or dependencies. We recommend that you just experiment it with RAG pipeline within your Haystack framework, and we do not recommend using it for production. If you want a much more scalable solution for your apps or even enterprise projects, we recommend using Zilliz Cloud, which is a fully managed vector database service built on the open-source Milvusand offers a free tier supporting up to 1 million vectors

OpenAI GPT-3-mini optimization tips

Optimize OpenAI GPT-3-mini in RAG by chunking input data into smaller, semantically coherent segments to reduce token waste and improve retrieval relevance. Use structured prompts with explicit instructions (e.g., "Answer based on: [context]") to guide outputs. Fine-tune temperature (0.2-0.5 for precision) and max tokens to balance brevity and completeness. Cache frequent queries to reduce latency and costs. Preprocess retrieved documents to remove redundancy and align with query intent. Monitor outputs via metrics like BLEU or ROUGE and iterate based on user feedback.

Optimum mpnet-base-v2 optimization tips

To optimize the performance of Optimum mpnet-base-v2 in a Retrieval-Augmented Generation (RAG) setup, consider fine-tuning the model on domain-specific data to improve its understanding of specialized queries. Leverage batch processing for efficient inference and experiment with reduced precision (e.g., mixed-precision or FP16) to speed up computation without sacrificing much accuracy. For better retrieval performance, optimize your vector store by choosing an appropriate indexing strategy, such as HNSW or IVF, and ensuring the embeddings are well-aligned with the query space. Additionally, consider using a smaller version of the model for less complex tasks to balance speed and resource usage. Regularly monitor the retrieval quality and adjust hyperparameters, such as the number of nearest neighbors, for the best results.

By implementing these tips across your components, you'll be able to enhance the performance and functionality of your RAG system, ensuring it’s optimized for both speed and accuracy. Keep testing, iterating, and refining your setup to stay ahead in the ever-evolving world of AI development.

RAG Cost Calculator: A Free Tool to Calculate Your Cost in Seconds

Estimating the cost of a Retrieval-Augmented Generation (RAG) pipeline involves analyzing expenses across vector storage, compute resources, and API usage. Key cost drivers include vector database queries, embedding generation, and LLM inference.

RAG Cost Calculator is a free tool that quickly estimates the cost of building a RAG pipeline, including chunking, embedding, vector storage/search, and LLM generation. It also helps you identify cost-saving opportunities and achieve up to 10x cost reduction on vector databases with the serverless option.

Calculate your RAG cost now.

Calculate your RAG cost

What Have You Learned?

By diving into this tutorial, you’ve unlocked the magic of building a RAG system from the ground up! You learned how Haystack acts as the flexible backbone, orchestrating the entire pipeline to connect your data, embeddings, and language model seamlessly. The Haystack In-memory store became your go-to for lightning-fast vector storage and retrieval, proving you don’t need complex infrastructure to start experimenting. With Optimum’s mpnet-base-v2, you saw how to generate rich, context-aware embeddings that turn messy text into meaningful numerical representations—essential for finding the right information quickly. Then came the star of the show: OpenAI’s GPT-3.5-turbo, which transformed those retrieved snippets into polished, human-like answers, showcasing the power of combining structured data with creative language generation. Along the way, you picked up pro tips like tweaking chunk sizes for better performance and leveraging caching to save time and resources, all while using the free RAG cost calculator to keep your projects budget-friendly and scalable.

Now that you’ve seen how these pieces fit together, imagine the possibilities! Whether you’re building a chatbot, a research assistant, or a knowledge hub, you’re equipped to innovate. The tools are yours to customize—swap embedding models, experiment with different LLMs, or optimize pipelines for speed and accuracy. Remember, every iteration brings you closer to a smarter, faster, and more intuitive application. So go ahead, take what you’ve learned, and start creating. The world of RAG is vast and full of potential, and you’re now ready to shape it. Build boldly, optimize fearlessly, and let your ideas shine. The next breakthrough? It could be yours! 🚀

Further Resources

🌟 In addition to this RAG tutorial, unleash your full potential with these incredible resources to level up your RAG skills.

How to Build a Multimodal RAG | Documentation
How to Enhance the Performance of Your RAG Pipeline
Graph RAG with Milvus | Documentation
How to Evaluate RAG Applications - Zilliz Learn
Generative AI Resource Hub | Zilliz

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