Build RAG Chatbot with Llamaindex, Faiss, DeepSeek V3, and OpenAI text-embedding-ada-002

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:

Llamaindex: a data framework that connects large language models (LLMs) with various data sources, enabling efficient retrieval-augmented generation (RAG). It helps structure, index, and query private or external data, optimizing LLM applications for search, chatbots, and analytics.
- Faiss: also known as Facebook AI Similarity Search, is an open-source vector search library that allows developers to quickly search for semantically similar multimedia data within a massive dataset of unstructured data. (If you want a much more scalable solution or hate to manage your own infrastructure, we recommend using Zilliz Cloud, which is a fully managed vector database service built on the open-source Milvus and offers a free tier supporting up to 1 million vectors.)
DeepSeek-V3: DeepSeek-V3 is a cutting-edge, open-weight large language model (LLM) with 685 billion parameters, excelling in code generation, mathematical reasoning, and long-context understanding (up to 128K tokens). It adopts the MIT license, enabling free modification, distribution, and commercial use.
OpenAI text-embedding-ada-002: A state-of-the-art embedding model designed to convert text into high-dimensional vectors, capturing semantic meaning for tasks like search, clustering, and recommendations. Renowned for efficiency, scalability, and cost-effectiveness, it excels in natural language processing applications, particularly where understanding contextual relationships and similarity across large datasets is critical.

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 Llamaindex

pip install llama-index

Step 2: Install and Set Up DeepSeek V3

%pip install llama-index-llms-deepseek

from llama_index.llms.deepseek import DeepSeek

# you can also set DEEPSEEK_API_KEY in your environment variables
llm = DeepSeek(model="deepseek-chat", api_key="you_api_key")

# You might also want to set deepseek as your default llm
# from llama_index.core import Settings
# Settings.llm = llm

Step 3: Install and Set Up OpenAI text-embedding-ada-002

%pip install llama-index-embeddings-openai

from llama_index.embeddings.openai import OpenAIEmbedding

embed_model = OpenAIEmbedding(
    model="text-embedding-ada-002",
)

Step 4: Install and Set Up Faiss

%pip install llama-index-vector-stores-faiss

from llama_index.core import (
    SimpleDirectoryReader,
    load_index_from_storage,
    VectorStoreIndex,
    StorageContext,
)
from llama_index.vector_stores.faiss import FaissVectorStore

vector_store = FaissVectorStore(faiss_index=faiss_index)

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 with your own dataset to customize your RAG chatbot.

import requests

from llama_index.core import SimpleDirectoryReader

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

print("Document ID:", documents[0].doc_id)

storage_context = StorageContext.from_defaults(vector_store=vector_store)
index = VectorStoreIndex.from_documents(
    documents, storage_context=storage_context, embed_model=embed_model
)

query_engine = index.as_query_engine(llm=llm)
res = query_engine.query("What is Milvus?")  # You can replace it with your own question.
print(res)

Example output

Milvus is a high-performance, highly scalable vector database designed to operate efficiently across various environments, from personal laptops to large-scale distributed systems. It is available as both open-source software and a cloud service. Milvus excels in managing unstructured data by converting it into numerical vectors through embeddings, which facilitates fast and scalable searches and analytics. The database supports a wide range of data types and offers robust data modeling capabilities, allowing users to organize their data effectively. Additionally, Milvus provides multiple deployment options, including a lightweight version for quick prototyping and a distributed version for handling massive data scales.

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.

LlamaIndex optimization tips

To optimize LlamaIndex for a Retrieval-Augmented Generation (RAG) setup, structure your data efficiently using hierarchical indices like tree-based or keyword-table indices for faster retrieval. Use embeddings that align with your use case to improve search relevance. Fine-tune chunk sizes to balance context length and retrieval precision. Enable caching for frequently accessed queries to enhance performance. Optimize metadata filtering to reduce unnecessary search space and improve speed. If using vector databases, ensure indexing strategies align with your query patterns. Implement async processing to handle large-scale document ingestion efficiently. Regularly monitor query performance and adjust indexing parameters as needed for optimal results.

Faiss Optimization Tips

To enhance the performance of the Faiss library in a Retrieval-Augmented Generation (RAG) system, begin by selecting the appropriate index type based on your data volume and query speed requirements; for example, using an IVF (Inverted File) index can significantly speed up queries on large datasets by reducing the search space. Optimize your indexing process by using the nlist parameter to partition data into smaller clusters and set an appropriate number of probes (nprobe) during retrieval to balance between speed and accuracy. Ensure the vectors are properly normalized and consider using 16-bit or 8-bit quantization during indexing to reduce memory footprints for large datasets while maintaining reasonable retrieval accuracy. Additionally, consider leveraging GPU acceleration if available, as Faiss highly benefits from parallel processing, leading to faster nearest neighbor searches. Continuous fine-tuning and benchmarking with varying parameters and configurations can guide you in finding the most efficient setup specific to your data characteristics and retrieval requirements.

DeepSeek V3 optimization tips

DeepSeek V3 benefits from optimized retrieval and structured prompting to generate high-quality responses in RAG workflows. Improve retrieval accuracy by using domain-specific embeddings and reranking retrieved documents for relevance. Implement hierarchical chunking to structure long-form documents while keeping inputs within token limits. Use prompt tuning to guide the model’s reasoning and reduce hallucinations. Enable caching for frequently accessed knowledge to minimize latency and API costs. Experiment with retrieval augmentation techniques, such as query expansion, to improve recall. Monitor system performance and refine retrieval parameters continuously to maintain an efficient and cost-effective setup.

OpenAI text-embedding-ada-002 optimization tips

To optimize text-embedding-ada-002 in RAG, ensure input text is clean and concise—remove irrelevant content, truncate long documents to the 8191-token limit, and normalize casing/punctuation. Batch embedding requests to reduce latency and costs. Use cosine similarity for relevance scoring, as embeddings are normalized. Cache frequent or static embeddings to avoid reprocessing. Experiment with chunk sizes (256-512 tokens) to balance context retention and granularity. Monitor embedding quality via downstream task performance and adjust preprocessing or retrieval thresholds as needed.

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?

Wow, what a journey you've embarked on through this tutorial! You’ve taken the leap into the fascinating world of Retrieval-Augmented Generation (RAG) systems by integrating powerful components like LlamaIndex, Faiss, DeepSeek V3, and OpenAI's text-embedding-ada-002. Through this hands-on exploration, you've learned how to build a dynamic pipeline that drives innovation, allowing you to enhance the capabilities of large language models (LLMs) with effective information retrieval. By leveraging LlamaIndex as your framework and Faiss as your chosen vector database, you can efficiently organize and access vast datasets while unlocking the full potential of DeepSeek V3's advanced retrieval techniques. And let’s not forget about the remarkable embedding model from OpenAI that elevates the quality of your responses—how exciting is that?

But wait, there’s more! Throughout the tutorial, we’ve shared some optimization tips to help you fine-tune your system for peak performance, along with a handy free RAG cost calculator to empower your budgeting decisions. This is just the beginning! With these tools at your fingertips, the possibilities are endless. So, get out there and start building, optimizing, and innovating your own RAG applications! Harness the knowledge you've gained, explore new ideas, and let your creativity soar. You’ve got this—go make something amazing happen!

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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