Generative AI is a subset of artificial intelligence that creates new content, such as images, text, music, or videos, by learning patterns from existing data. It relies on advanced machine learning modelsto produce outputs that mimic human creativity. 

VAEs are probabilistic models that encode images into a latent space, where they are represented as vectors. The decoder then reconstructs the images from the encoded vectors, enabling the model to generate new images by sampling from the latent space. 

GANs consist of two neural networks, a generator, and a discriminator, engaged in a competitive process. The generator creates synthetic images to fool the discriminator, which, in turn, aims to distinguish between real and fake images. This back-and-forth battle results in the generation of highly realistic images.