The Inference Report

May 5, 2026

The financialization of artificial intelligence has entered a new phase. OpenAI extracted $10 billion from a consortium of 19 Wall Street firms while Anthropic closed $1.5 billion from Blackstone, Goldman Sachs, and Hellman & Friedman, then immediately launched a joint venture with those same asset managers to aggressively market enterprise AI products. This is not a go-to-market strategy shift. This is a distribution layer replacement. Venture capital, which built these companies, has been superseded by private equity, which brings patient capital, institutional sales relationships, and the ability to embed AI into existing portfolios rather than pitch it as a standalone product. Cerebras is heading for a blockbuster IPO valued at $26.6 billion or more. The money is flowing to companies positioned as infrastructure or enterprise tools, not consumer products or research labs.

Yet actual product performance is diverging sharply from market narrative. Microsoft announced more than 20 million paying Copilot users, up 33 percent from 15 million in January, but the company is not claiming those users are generating outsized productivity gains or revenue. Image AI models now drive app downloads at 6.5 times the rate of chatbot upgrades, yet most of those downloads do not convert to revenue. Anthropic, which bills itself as the most sophisticated evaluation shop in AI, shipped three quality regressions in Claude Code that its own internal evaluations did not catch. The gap between what AI can do and what it actually does for paying customers is widening, not closing. Capital is flowing into the space anyway because the institutional buyers now have skin in the game and incentive to make the bet work.

OpenAI and Anthropic are racing to embed themselves into enterprise workflows through vertical integration and partnership capital, while IBM and AWS are positioning infrastructure and orchestration as the durable layer beneath that stack. What is absent is any lab announcing a pure model capability that does not come bundled with services, deployment, or infrastructure commitments. The era of selling weights is over. In software engineering benchmarks, Claude Opus 4.6 holds the SWE-rebench top position at 65.3 percent, with gpt-5.2-2025-12-11-medium, GLM-5, and Junie clustered tightly behind it. Yet the divergence between SWE-rebench and Artificial Analysis suggests these benchmarks measure different failure modes: SWE-rebench tests unmodified real pull requests requiring executable validation, while Artificial Analysis appears to weight instruction-following and synthetic tasks more heavily. Developers on GitHub are moving past simple LLM calls toward agent orchestration frameworks that coordinate multiple instances toward specific goals, while simultaneously prioritizing privacy and local control through tools that keep data on device and offer open replacements for SaaS incumbents. The question now is whose orchestration layer becomes the standard, and whether that standard is open or proprietary.

Grant Calloway

AI LabsAll labs
From the WireAll feeds
Research Papers — FocusedAll papers
Hybrid Lagrangian-Eulerian Model for Lagrangian Fluid Simulation cs.CE

Pure Lagrangian neural simulators offer geometric flexibility and exact advection, making them well-suited for modeling moving domains and free surfaces. However, the absence of a fixed global reference frame introduces two severe limitations: a spatial bottleneck, in which model capacity is wasted on uniform regions because the dense particle neighborhoods required for stable gradients are applied indiscriminately, and rapid temporal drift, caused by purely local message passing that lacks a global anchor. Inspired by classical hybrid numerical solvers, we propose a Hybrid Lagrangian-Eulerian neural simulator that augments Lagrangian dynamics with an Eulerian representation. To address the spatial bottleneck, we introduce adaptive downsampling that eliminates kinematic redundancy, preserving micro-scale details on particles while aggregating compressed features onto Eulerian nodes to resolve large-scale dynamics. To counter temporal drift, we employ a cross-attention mechanism that queries these Eulerian features, using the fixed grid as a stable spatial anchor to correct trajectory deviations at every timestep. Comprehensive experiments show that this hierarchical, cross-attended design substantially suppresses error accumulation, establishing a new state-of-the-art for accuracy and rollout stability in Lagrangian fluid simulation.

TransNRank: Towards Accurate Neoantigen Ranking with Transformer cs.CE

Personalized neoantigen prediction is challenging due to the scarcity of positive samples, the noise of the experimental data, the severe class imbalance trait and the complex of immunogenicity features. Prior arts, such as linear regression and XGBoost fail to model long-range dependencies and contextual relationships within peptide features, therefore the performance of neoantigen positive recall rate is limited. In this paper, we present a novel deep learning framework based on Transformer, coined as TransNRank. By leveraging the self-attention mechanism, our model captures both local and global feature contexts, enabling more accurate recognition of immunogenic neoantigens. A positive-aware training objective is utilized to handle the class imbalance problem, assigning more weights to those few positive samples. Extensive experiments are performed on NCI, TESLA and HiTIDE datasets. Notably, our TransNRank can push the upper bound top 20 recall rate of neoantigen prediction from 46.9% (45 from 96) to 53.1% (51 from 96), while reducing the training epochs from 200 epochs to 20 epochs. Furthermore, we analyze the features contribution based on TransNRank and find that the mutation at anchor and TCGA expression level play an unexpected important role in neoantigen prediction, and removing insignificant features to reduce the input dimensionality of peptides does not drastically impair the overall performance of the model. Our paradigm not only streamlines the prediction pipeline but also sets a new state-of-the-art for neoantigen discovery, with broad implications for accurate immuno-oncology.

Can Large Language Models Execute Parent Orders? cs.CE

Parent-order execution is a core problem in algorithmic trading, where the goal is to split a large order into smaller orders while reducing execution costs. Existing approaches either rely on pre-specified market assumptions that may not hold in practice, or require task-specific training that limits adaptability to new settings. To overcome these limitations, we present the first systematic study of large language models (LLMs) for parent-order execution. This extends the use of LLMs in finance from what to trade to how to execute. We propose PACE (Plan-Ahead Controlled Execution), a hierarchical framework that decomposes parent-order execution into long-horizon planning and short-horizon execution, requiring neither explicit market assumptions nor task-specific training. Experiments on Shenzhen Stock Exchange Level-1 data show that PACE outperforms TWAP, Almgren-Chriss, and learning-based baselines, exceeding the strongest baseline by 0.65 bps. Behavioral analysis reveals that LLMs make execution decisions differently from human investors: higher model confidence predicts better performance rather than worse returns, and the model trades earlier rather than procrastinating toward the deadline. These findings suggest that LLMs can complement human traders in execution decisions.

A scalable online machine learning approach for Stock Recommendation cs.CE

Stock recommendation systems face the dual challenge of adapting to rapidly changing market conditions while maintaining low-latency predictions for end users. Traditional batch-trained models fail to capture concept drift, and monolithic architectures struggle to provide fault tolerance under load. This paper presents a scalable online deep learning-based stock recommendation system built on a distributed microservices architecture using Kubernetes, Docker, and RabbitMQ. The system employs a hybrid leader-follower architecture where a primary model continuously trains on streaming financial data, including EPS, MACD, and price, from the Alpha Vantage API while multiple replica models serve user-facing recommendations in parallel. A multilayer perceptron implemented with TensorFlow Recommenders generates content-based recommendations using explicit user ratings (1-5) and transfer learning. The architecture ensures high availability. The leader persists model weights to Google Cloud Object Storage, allowing replicas to recover seamlessly upon failure, while RabbitMQ provides message durability and replay. Results demonstrate that the system serves stock recommendations in 23 seconds per request and processes up to 500 portfolio addition requests per second per follower. Key limitations include data staleness (up to 150 minutes due to API rate limits) and the absence of a service mesh for inter-cluster security. This work contributes a production-ready reference architecture for online recommender systems that balances consistency, availability, and scalability in a financial domain context

Chemical Chain-of-Thought Functions as a Hallucination-Prone Molecular Scratchpad cs.CE

Chemical reasoning language models are expected to derive molecular answers through faithful chain-of-thought (CoT). However, across four reasoning model families and twelve chemistry tasks, hallucination is widespread and largely decoupled from answer correctness: correct answers often coexist with fabricated structural claims absent from the relevant molecules. Yet this does not make the reasoning trace computationally irrelevant. Attribution analyses suggest a shared scratchpad function expressed in model-specific forms: Chem-R and ether-0 rely on fragmented SMILES drafts, whereas ChemDFM-R emphasizes scaffold, positional, and naming cues. Notably, perturbing Chem-R's SMILES sketches degrades generation, showing that structural drafts can be causally load-bearing even when verbal structural claims are largely inert. Together, these results show that chemical CoT is neither a faithful explanation nor merely a post-hoc rationalization, but a hallucination-prone molecular scratchpad. This finding cautions against treating CoT as direct evidence of faithful reasoning and motivates process-level supervision beyond answer-only evaluation.

Accounting for Hysteresis and Eddy Currents in Finite Element Simulations of Ferromagnetic Laminated Cores using a Recurrent Neural Network cs.CE

Incorporating hysteresis and eddy currents into finite element simulations of laminated-core electrical machines is computationally challenging. Resolving the fields inside the laminations at each integration point and at every nonlinear iteration leads to computational costs several orders of magnitude higher than anhysteretic simulations, making such approaches impractical for design applications. Conversely, simplified models accounting only for magnetic saturation are becoming increasingly inadequate as electrical machine topologies and operating conditions grow in complexity. In this context, machine learning surrogate modeling has emerged as a promising alternative, offering efficient and accurate approximations of complex electromagnetic behaviors. In this paper, a recurrent neural network is trained as a surrogate of a laminated-core material model for an isotropic laminated core, and is integrated into realistic two-dimensional magnetodynamic finite element simulations based on a magnetic vector potential formulation. The proposed approach achieves excellent agreement with the reference laminated-core model while limiting the computational cost to about twice that of an anhysteretic simulation. By training the recurrent neural network on a sufficiently diverse set of artificially generated magnetic field sequences designed to mimic those encountered in electrical machine simulations, the proposed approach can be readily applied across a wide range of finite element simulations. Furthermore, the trained surrogate model is provided as a standalone component that can be easily incorporated into existing computational frameworks. It is publicly available at https://gitlab.onelab.info/getdp/lamnet.

BenchmarksFull tables
Artificial AnalysisIntelligence Index

Composite score across coding, math, and reasoning

#ModelScoretok/s$/1M
1GPT-5.560.274$11.25
2Claude Opus 4.757.358$10.94
3Gemini 3.1 Pro Preview57.2130$4.50
4GPT-5.456.886$5.63
5Kimi K2.653.930$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%