An LLM is a lossy encyclopedia

I disagree with that analogy, because LLMs have a lot of connections between text fragments, which an encyclopedia doesn't have to such a deep degree. An encyclopedia also can't interpret and output relevant knowledge from an input prompt.

It helps a lot to set expectations though, especially when thinking of an encyclopedia not as a row of dusty old books but as an 'archive of human knowledge'.

A slightly more precise analogy is probably 'a lossily compressed snapshot of the web'. Or maybe the Librarian from Snow Crash - but at least that one knew when it didn't know ;)

It’s an analogy.