The Inference Report

May 2, 2026

The market is fragmenting along a clear axis: companies that move fast and build products are pulling away from those relying on regulatory friction and litigation to protect position. Musk's courtroom testimony against OpenAI admits xAI distills OpenAI's models while arguing the company betrayed its nonprofit mission, yet the Pentagon simultaneously signs deals with Nvidia, Microsoft, and AWS to diversify AI vendors after its own dispute with Anthropic over usage terms. Competition requires actual alternatives, but alternatives keep getting acquired. Cursor's reported $60 billion acquisition talks with SpaceX matter less for what they reveal about Cursor's value than for what they signal about consolidation math: if your product works, the acquirer will pay more than the market could ever allocate independently.

Models are commoditizing faster than the industry acknowledges. GPT-5.5 matches Mythos Preview in new cybersecurity tests, suggesting that cyber threat attribution to any single model is not a breakthrough but rather a feature of the capability tier itself. Models tuned to prioritize user satisfaction over truthfulness make more errors, which describes the actual tradeoffs built into deployment. The Pentagon's diversification strategy and DOD friction with Anthropic reveal an institution learning that single-vendor dependency creates leverage problems. Competition in AI infrastructure is real. Competition in capability differentiation is narrowing. Meanwhile, Chinese models are consolidating gains on code benchmarks: GLM-5 jumped from rank 17 to rank 3 on SWE-rebench, while Kimi K2.5 climbed from rank 29 to rank 16, suggesting systematic capability improvements across families rather than breakthrough leaps from any single model.

Regulatory capture is dressing itself as safety. Minnesota passes a ban on fake AI nudes with $500K fines while a new Christian cell network blocks pornography at the network level in ways adult users cannot override. English councils will trial Google AI tools to recommend planning decisions. These represent a shift from "AI companies should self-regulate" to "governments will regulate AI through whatever lever is closest at hand," often meaning regulation of user behavior rather than systems themselves. Platforms that claim they cannot moderate content at scale suddenly find themselves capable of blocking entire categories of speech when regulatory pressure arrives. That capability was always there. The question is only who decides when to use it.

Established labs are competing through distribution and positioning rather than capability announcements. Google is positioning scientific research as a partnership play built on open resources, signaling that influence in academia carries longer-term strategic value than proprietary model dominance alone. IBM is chasing immediate commercial application through consumer engagement via the Ferrari app and enterprise consulting to private equity firms. Neither involves breakthrough capability claims, underscoring a shift in how labs compete: not through raw capability but through distribution channels and positioning as trusted advisors in specific verticals. The real competition is over who owns the relationship when enterprises decide what to build with AI.

Grant Calloway

AI LabsAll labs
From the WireAll feeds
Research Papers — FocusedAll papers
Sublogarithmic Swap Regret in Multiplayer General-Sum Games via Hybrid Regularization cs.GT

Swap regret governs the rate at which uncoupled learning dynamics converge to correlated equilibria in multiplayer general-sum games. Under full-information feedback, the best previous guarantee when every player follows the same dynamics grows logarithmically in the horizon $T$. We construct uncoupled dynamics under which every player incurs only $O(nm^2\sqrt{\log m\log T})$ swap regret, where $n$ is the number of players and $m$ bounds the number of actions per player. To our knowledge, this is the first sublogarithmic individual guarantee in this setting, and it implies that the time-averaged product distribution of play is an $O(nm^2\sqrt{\log m\log T}/T)$-approximate correlated equilibrium. The key algorithmic choice is to combine the Blum--Mansour reduction with optimistic follow-the-regularized-leader using a hybrid regularizer that separately weights negative Shannon entropy and the log-barrier: the entropy controls the optimistic prediction error, whereas the log-barrier controls the transition-matrix movement through its Bregman divergence. A new sensitivity theorem for stationary distributions of Markov chains, which involves neither mixing parameters nor the smallest transition probability, transfers this control to the played strategies and yields a simpler analysis without local-norm or self-concordance arguments. The guarantee is preserved by an adversarially robust variant that additionally ensures $O(nm^2\sqrt{\log m\log T}+\sqrt{mT\log m})$ swap regret against arbitrary utility sequences, and by a horizon-free variant that requires no prior knowledge of $T$.

EFX Allocation In (Multi)Hypergraphs cs.GT

We study fair allocations of indivisible goods among agents with heterogeneous monotone valuations. As fair we consider the allocations that are envy-free-up-to-any-good (EFX). Finding if EFX alloca- tions always exist, even for agents with additive valuations, is a major open problem in Fair Division. Christodoulou et al. (2023) introduced the (multi-hyper)graph setting, where agents and goods are represented by vertices and edges of a graph, respectively, and only the endpoints of an edge may have non-zero marginal value for it. We show that for hypergraphs with girth at least 4 and agents with general monotone valuations there always exists an EFX allocation and can be constructed in polynomial time. We generalize our approach to also show that multi-hypergraphs with girth (on the simple hypergraph) at least 4 always admit an EFX allocation, as long as there exists a single vertex whose incident edges have multiplicity at most the size of that edge minus 2; our construction in this case needs pseudo-polynomial time.

Intention Inference Under Execution Noise: Separating Aleatoric and Epistemic Uncertainty in Social Dilemmas cs.GT

In noisy social dilemmas, intended actions are stochastically corrupted before execution, so an observed defection may reflect hostile intent or action error. Standard Markov Decision Process (MDP) formulations treat executed actions as states, structurally precluding this distinction and causing systematic over-retaliation. We introduce a Partially Observable MDP (POMDP) formulation encoding opponent intentions as latent states and executed actions as noisy observations, solved within the active inference (AIF) framework with a cost function that decomposes into epistemic and pragmatic components that jointly address inferring current intent and learning how intent evolves. In the Iterated Prisoner's Dilemma with symmetric noise, we derive a critical noise threshold governing cooperation collapse, connecting it to a fixed-point condition on learned priors. Experiments reveal that the value of intention inference is context-dependent: the POMDP provides consistent advantages against conditionally cooperative opponents, but mutual intention inference under sufficient noise produces correlated belief-driven collapse. The advantage is specific to games where intent attribution is decision-relevant.

Strategy, Not Payoffs: A Behavioural Embedding of Normal-Form Games cs.GT

Learning a strategic task changes more than what is directly taught: fine-tuning on one game can either enhance or degrade an agent's ability to reason in another. Understanding and predicting this transfer of strategic capabilities, however, remains a key challenge for large language models (LLMs). Normal-form games provide an ideal testbed for analyzing this phenomenon, as they feature explicitly defined payoffs and well-characterized equilibrium behaviours. In this work, we investigate whether game embeddings can explain and predict changes in LLM strategic capabilities following fine-tuning across different games. We propose a lightweight two-feature embedding that captures fundamental behavioural demands: the entropy of the Nash equilibrium and the sensitivity of optimal responses to an opponent's action. We show that while existing published structural embeddings primarily memorize game identities and fail to generalize, our behavioural embedding reliably predicts performance changes on held-out games. These results demonstrate that the transfer of strategic capabilities in LLMs is not dictated by the payoff geometry of a game, but by the underlying structure of the decision-making behaviour it requires.

Agents That Certify Their Own Exploits: Confidence-Scheduled Restricted Responses for Safe Opponent Exploitation cs.GT

An agent playing a Nash-equilibrium strategy in a two-player zero-sum imperfect-information game secures the game value but forfeits the additional value offered by a flawed opponent. Diffuse deviations pose a particular challenge: binary release rules may gather too little evidence to act, while a full best response to an incomplete opponent model can be highly exploitable. We introduce \emph{budget-constrained confidence-scheduled restricted responses} (CS-RNR), the first opponent-exploitation method whose safety guarantee is a certificate the agent computes on the strategy it actually deploys, so that every exploit it commits to is one it has audited itself. The method tracks pooled action frequencies with anytime-valid confidence sequences and treats a frequency as exploitable only once its interval separates from an equilibrium reference. The confirmed deviations define a conservative opponent model, which a restricted-response solve turns into candidate counter-strategies over a grid of pin levels. Before deployment, each complete candidate is evaluated by a full-tree best response. The resulting certificate is compared with a user-specified budget and committed atomically with the strategy. Because this check is performed on the played strategy, model quality determines the exploitation achieved while the certificate controls reference-relative expected loss. In Leduc hold'em, CS-RNR obtains $6.2\times$ the steady-state gain of a money-verified binary gate while keeping every deployed strategy within budget. A trajectory mixture using the same estimator reaches $13.6\times$ the budget. Across Leduc, Liar's Dice, and 5-rank Leduc, all $36{,}000$ audited hands satisfy the reported certificate tolerance.

Algorithms for Structured Elections under Thiele Voting Rules cs.GT

We study the computational complexity of winner determination problems in approval-based committee elections under Thiele voting rules. These form a class of rules parameterized by a fixed weight vector that specifies how a voter's satisfaction depends on the number of approved candidates elected. We first analyze the structure of optimal solutions based on the sets of voters who approve each candidate---that is, how voters' approval ballots induce dependencies between candidates---revealing constraints on a winning committee under any fixed Thiele voting rule. Using this, we design FPT algorithms for Proportional Approval Voting (PAV) and other Thiele rules on a natural restricted domain known as the Voter Interval (VI) domain---that is, after a suitable ordering of voters, each candidate is approved by a consecutive interval of voters. In particular, we show that every Thiele rule on VI is FPT with respect to a parameter for which the problem is NP-hard on general instances, even when the parameter takes constant values. Our results advance the understanding of the computational complexity of PAV on Voter Interval instances, which remains one of the central open questions in this area. We further resolve two open questions from the literature on PAV (and other Thiele voting rules) by providing a polynomial-time algorithm for instances where each candidate is approved by at most two voters, and an FPT algorithm parameterized by the total score of a winning committee.

BenchmarksFull tables
Artificial AnalysisIntelligence Index

Composite score across coding, math, and reasoning

#ModelScoretok/s$/1M
1GPT-5.560.273$11.25
2Claude Opus 4.757.351$10.00
3Gemini 3.1 Pro Preview57.2132$4.50
4GPT-5.456.886$5.63
5Kimi K2.653.925$1.71
SWE-rebench

Agentic coding on real-world software engineering tasks

#ModelScore
1Claude Opus 4.665.3%
2gpt-5.2-2025-12-11-medium64.4%
3GLM-562.8%
4Junie62.8%
5gpt-5.4-2026-03-05-medium62.8%