Overfitting occurs when a model is trained too closely on the training data, leading to a model that performs very well on the training data but poorly on new data. This is because the model has been trained too closely to the training data, and so cannot generalize the patterns it has learned to new data. To avoid overfitting, the ML team needs to ensure that their models are not overly trained on the training data and that they have enough generalization capacity to be able to perform well on new data.