Generative AI models can generate new content like images, text, and music that closely resembles human-created content using techniques like deep learning and neural networks. It starts with a prompt and various AI algorithms return new content in response. Generative AI has applications in chatbots, deepfakes, dubbing, writing responses, creating art, improving videos, suggesting drug compounds, designing products, optimizing chip designs, and writing music in specific styles. While it can automate content creation and response, limitations include not identifying content sources and bias in original sources and results.