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 Venture capital, which built these companies, has been superseded by private equity, which brings patient capital, institutional sales relationships, and the ability to embed AI into existing portfolios rather than pitch it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

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From the WireAll feeds
Research Papers — FocusedAll papers
Physics-Informed Sinusoidal Representation Networks for Damage Identification in Ultrasonic Guided Wave Structural Health Monitoring cs.CE

Ultrasonic guided wave (UGW) inspection has become an effective method in structural health monitoring (SHM). While machine learning has enhanced damage detection capabilities, purely data-driven models remain constrained by extensive labeled datasets and limited physical interpretability. Standard multi-layer perceptrons (MLPs) further suffer from spectral bias (F-Principle) in high-frequency regimes, prioritizing low-frequency components while failing to resolve the high-frequency oscillations critical for UGW reconstruction. Physics-Informed Sinusoidal Representation Networks (PI-SIRENs) address these limitations by embedding governing partial differential equations directly into the training process. Building upon SIRENs, which utilize periodic activation functions to inherently capture high-frequency spectral content, the proposed framework is designed to operate effectively in sparse ultrasonic measurement regimes. This work introduces a frequency-domain PI-SIREN framework tailored for the Mindlin-Reissner plate theory to reconstruct ultrasonic wavefields without temporal discretization. The model parameters are optimized using a hybrid strategy comprising three phases: first-order Adam, residual-adaptive refinement (RAR) and quasi-Newton L-BFGS. Numerical and experimental evaluations confirm that the model serves as a physics-consistent baseline derived from sparse data, functioning as a computationally efficient surrogate for damage identification in SHM and non-destructive testing (NDT). Integrating the surrogate into a damage identification pipeline detects and localizes a milled notch from sparse experimental measurements with a localization error of 1 % of the plate diagonal. In contrast, data-driven benchmarks and MLPs with hyperbolic tangent activation functions, with and without Fourier feature embedding, are unable to identify damage due to higher reconstruction errors.

Physics-informed neural networks in the small-data regime: A controlled comparison with classical PDE surrogates cs.CE

Neural surrogates for engineering models are often trained on large collections of simulated solutions. We investigate whether physics-informed neural networks (PINNs) can achieve accurate predictions from scarce labelled observations by incorporating governing equations and prescribed initial and boundary conditions. We introduce hierarchical loss weighting (H-PINN) and its gradient-direction-aware extension (HO-PINN), which adjust the emphasis on physical constraints according to higher-priority losses. Hierarchical PINNs are compared with Vanilla PINN, tuned gradient boosting, support-vector regression, and Gaussian-process regression on a heat equation and three heterogeneous two-phase-flow benchmarks. Experiments use 20--1000 labelled states and ten paired seeds. Each label is one coordinate--state observation, not a complete simulation. At least one PINN variant achieves the highest mean primary-target \(R^2\) in each interpolation and equation-assisted forecasting comparison at 20 and 50 labels. The advantage for water saturation persists across all tested budgets. Hierarchical weighting reduces variability across runs in selected settings. These results demonstrate that known physics can support accurate neural surrogate predictions from very few solution observations, at substantially higher fitting cost than the tested classical regressors.

ProteoCraft: Protein Design as Proposal-Verification Search cs.CE

Protein-protein interactions underpin nearly all biological processes. Yet, designing proteins with desired interactions remains challenging due to the structural complexity governing molecular recognition. This study views protein design as a search optimization problem over a combinatorial sequence space under expensive structural evaluation. Toward this goal, we introduce a novel tree-based search framework, ProteoCraft, that employs approximate structural gradients from diffusion-based structure predictors as effective proposal policies to specify where the search should explore. Complete no-gradient inference of folding models separately assigns values to the resulting sequences, determining what is good. ProteoCraft allocates this verification budget through a coarse-to-fine paradigm: multi-site edits first explore distinct sequence basins, then verified promising states undergo strict single-site refinement. Across fourteen de novo binder-design settings spanning eight target proteins, five immune-relevant TCR-facing targets, and four localized CDR redesign tasks, ProteoCraft improves design quality and high-confidence yield. These improvements persist under independent AF2-IG and Rosetta-based interface evaluation. Prospective experimental validation further yielded an 82.9% binding hit rate for PD-L1 miniproteins, with a best measured KD of 0.879 nM, and confirmed binding of designed IFNAR2 VHH. Our code is available at https://github.com/smiles724/ProteoCraft_v1.

Inner optimizers in active-learning Kriging reliability analysis: a pre-specified comparison and the unconservative estimates left by unlearned failure modes cs.CE

Active-learning Kriging often replaces candidate pools by continuous metaheuristic search. A pre-specified comparison sharing surrogate, population and stopping rule isolated this inner optimizer: five budget-matched continuous optimizers, including hybrid swarm optimization with L-BFGS-B polishing, against candidate pools on eleven problems (dimension 2 to 100). The primary hypothesis was not supported: against optimizers sharing its criterion the hybrid won 6, tied 41 and lost 19 of 66 Holm-corrected accuracy comparisons, and against pool methods 0, 23 and 21 of 44. With sequential selection on three series systems, multistart L-BFGS-B left a failure mode unlearned in 59 of 60 runs, more often than swarm, genetic-algorithm or AK-MCS. In all 198 runs (22 post-freeze) with an unlearned mode, the learned modes did not compensate and failure probability was underestimated (exploratory). The error criterion can accept substantial underestimation: it accepted 17 runs (13 pool-selected) at 0.38 to 0.89 of the reference; 181 exhausted the budget. Follow-up analyses on single-design-point problems indicate underestimation when selections concentrate near the design point. Kriging-believer pool selection satisfied the surrogate stopping criterion with fewer calls than the best continuous method in all four informative batch cells (two post-freeze). We recommend default pool selection and coverage checks for any selection.

Learning Nonlocal Interactions in Large-Scale Heterogeneous Metamaterials through Scientific Machine Learning cs.CE

In multiscale systems, nonlocal interactions among spatially distributed constituents can unlock collective, potentially emergent behavior irreducible to individual constituent responses. Beyond characterization, nonlocality in multiscale systems is increasingly viewed as a design element across fracture mechanics, wave physics, and disordered systems. Existing nonlocality theories provide rigorous descriptions and mechanistic insight, but often require prescribed analytic forms, range, symmetries, or periodicity. Machine learning offers a data-driven route to learn interactions, yet principled approaches that tie the network design to physical theory remain nascent. Here we present domain-decomposition attention neural operator (DANO), which learns configuration-dependent interactions in heterogeneous systems governed by linear field equations from field data alone. Through a case study in large-scale optical metasurfaces, we demonstrate DANO's full-field prediction under geometric heterogeneity and across drive conditions, small-to-large domain transfer, and multifunctional inverse design, with learned interactions validated through physics-based interrogation. As an AI-for-Science tool, it supports interaction discovery and scalable, customizable design of nonlocal multiscale systems, including virtual-reality optics.

Tracekit Box: Running AI Agents in Micro-VMs Where Every Way Out Is Decided and Signed cs.CE

AI agents now install packages, call model APIs with their operators' keys and change code in repositories that deploy to production. The network, credentials and write access they need are also how they can leak data, steal a key or change a system nobody approved. Sandboxes contain an agent but leave little evidence of what crossed their boundary; tracing records what happened but contains nothing. We present Tracekit Box, an open-source system (MIT, v0) that does both. Each job runs in its own Firecracker micro-VM with no network card. The only ways out are doors on the host, served over vsock: commands, outbound connections, secrets, model calls and the workspace patch. At every door a Tracekit signer the agent cannot reach decides what passes and signs it into one run per box. Names are resolved on the host; private and cloud-metadata addresses are always refused; secrets never enter the VM, which sees placeholders the host proxy swaps for real values only in one header for bound hosts; and changes come back as a patch applied file by file after the signer decides each file. Box fails closed, and each job ends as a .tkb bundle anyone can verify offline. All 13 end-to-end checks pass on a real KVM runner (the test that runs them takes 28.5 s, including image pull and boot); 15 fuzz targets on the trust boundary produced nine findings, all fixed; and the demo run's 102 signed records verify. Box does not yet run Firecracker's jailer, needs a co-located signer, and records processes inside the VM only where they cross a door.

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%