Hallucination Mitigation with Agentic AI, Nested Learning, and AI Sustainability via Semantic Caching

Abstract

This paper describes an approach to hallucination detection and mitigation using a HOPE-inspired Nested Learning architecture with Continuum Memory Systems (CMS) and semantic similarity caching, tested on a hybrid benchmark of 310 prompts (217 epistemic-uncertainty prompts, 93 fabrication-induction stress tests). A three-stage pipeline orchestrated via the Open Floor Protocol is evaluated with five KPIs; four score the response and aggregate into a Total Hallucination Score. The score improves end to end by 6.1% of its attainable range, but 83.5% of that gain is attributable to a single dimension, Explicit Contextualization, while Factual Claim Density, the dimension closest to unsupported content, stays flat; 97.7% of the gain arrives at the first review stage. The fifth indicator, observability, is reported separately, since it registers the presence of an OFP annotation channel rather than a property of the response: it rises 147% at the review stage, the only stage carrying explicit hallucination markers, then falls back at the final stage, which does not propagate the channel. Three annotators independently labelled every final-stage response on the 93 stress prompts: in 10 of 93 cases (10.8%, 95% CI 5.9-18.7) the final answer still presents the invented item as real, at alpha=0.586, below the conventional threshold; Explicit Contextualization tracks these labels monotonically. Re-scoring all 930 outputs with Llama 3.1, Gemma 4, and Qwen 3 as judges confirms the gain and ranks the cross-family judges above the original evaluator against human labels (rho=-0.772 vs -0.477). Semantic caching serves 47.7% of model calls. A nominally multi-dimensional reliability score is thus effectively one-dimensional, and only that dimension has external support.