What is GraphRAG and how does it differ from standard RAG?

GraphRAG, introduced by Microsoft Research in 2024, builds a knowledge graph from the corpus by extracting entities and relationships with a language model, then uses the graph structure for retrieval rather than or in addition to vector similarity. It answers questions that require reasoning across multiple documents, like "summarize the main themes of this corpus," which vector search handles poorly. GraphRAG is expensive to build because it requires many language model calls during ingest, but it enables answering global questions standard RAG cannot.