A common case I have is when you don't have classifications to begin with. For example, you need to find what users complain about most. I take embeddings of all records, then cluster the embeddings into semantic groups, then ask an LLM to take a random sample from each clustered group and create a classification for that group.

This method is sensitive to the thresholds (what is the maximum distance between embeddings for them to be still considered part of the same semantic group), so I run it all in an agentic loop where an agent tries different thresholds and clustering algorithms until it's satisfied with the result, plus it may deduplicate some groups.

I run it all on self-hosted hardware, so it costs nothing to leave it running for, like, a night, and as a bonus, none of the corporate data leaves the office. I think a rigid set of manually created classifications may not capture all the possible classifications that can exist. Needs a review by a human, though.