Neural networks face the vanishing gradient problem as gradients become very small during backpropagation through many layers.
Activation functions like Sigmoid and Tanh can lead to gradients close to zero, hindering weight updates in earlier layers.
Choosing the right activation function is crucial for the performance of deep learning models, with options like ReLU, Leaky ReLU, and Softmax addressing the vanishing gradient issue.
Understanding activation functions and their impact can assist in designing more effective and accurate neural networks.