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Prompt engineering is the process of crafting effective input prompts to get the best results from AI models, particularly large language models. Its importance stems from the direct impact prompt quality has on AI performance, influencing accuracy and efficiency across various applications.

While offering significant benefits like improved AI-driven solutions and cost reduction, it also faces challenges such as inconsistencies and a lack of standardisation.

Successfully using prompt engineering requires understanding AI model capabilities, iterative experimentation, and employee training, with several prominent AI vendors providing tools to support this crucial skill.