> Language models are based on compression of information, using them as a knowledge base is entirely within capability

It's also the aspect of LLMs that degrades fastest with quantisation. You can't reasonably expect accurate knowledge of everything in the world in a few gigabytes.

Which means that small models need to be conditioned to rely more heavily on tools to fetch accurate information, and ideally not try and generate facts purely based on their (extremely lossy) internal knowledge