The Inference Report

June 2, 2026

Meanwhile, the companies building AI at scale have shifted from competing on model capability to competing on who can afford the infrastructure to run them. Alphabet's $80 billion stock sale, Anthropic's confidential IPO filing, and SpaceX's water-access disclosures all point to a single constraint: raw physical and financial resources. OpenAI's 1GW Michigan data center groundbreaking and its simultaneous move to distribute frontier models through AWS and Amazon Bedrock signal that compute capacity itself has become a competitive moat, while the chip makers NVIDIA and AMD are positioning around the software stacks that will make their hardware sticky for edge deployment and enterprise workloads. The shift from model capability to operational capacity is reshaping who gets to compete at all.

The economics of inference remain broken for many workloads, as GitHub Copilot's usage-based pricing and reports of users burning through monthly credit allotments in a single day make clear. Yet companies that can absorb high compute costs are capturing the value: GM's shift from 15-hour CFD simulations to one-minute AI-powered iterations demonstrates that the real margin accrues to those with existing distribution and hardware relationships. HPE's stock soared 37% on booming demand for data center equipment. Microsoft, Dell, and HP are shipping AI agent PCs as NVIDIA chases the $200 billion CPU market, because the cheaper economics of edge inference outweigh the latency trade-offs. The capital intensity of AI infrastructure is consolidating power among companies that can raise tens of billions and among those with existing relationships to enterprise procurement.

The secondary effects are already visible in operational failures. Meta's AI support chatbot was duped into helping steal Instagram handles because the company moved fast without production discipline. OpenAI faces a lawsuit from Florida over ChatGPT's alleged role in violent incidents, a category of liability that no insurance framework has priced in. Flowise's MCP implementation has a one-click remote code execution vulnerability affecting self-hosted deployments. A startup testing robots faces a $12,000 lawsuit after allegedly trashing an Airbnb. These failures are not failures of AI itself but of companies deploying it without the operational maturity that comes from running systems at scale under scrutiny. The winners in the next phase will not just be those who can raise capital and build chips. They will be those who can run production systems without breaking things.

The developer community is already building the infrastructure layer that this reality demands. GitHub's trending set shows aggressive infrastructure for AI agents: trading frameworks, memory engines, web scrapers, and terminal coding agents climbing the charts. TradingAgents sits at 82k stars because it solves a concrete problem, coordinating multiple LLM instances to make financial decisions. Equally important is conversion and data movement: microsoft/markitdown's 139k stars reflects that file format conversion is a solved problem that never stops being needed now that every document pipeline touches an LLM. The unglamorous work of getting data into shape before the model sees it is where the actual friction lives, and that is where serious projects are investing.

Grant Calloway

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From the WireAll feeds
Research Papers — FocusedAll papers
Neural ODE enhanced linear mixed effect models for estimating complex association patterns of time-varying covariates with the marker trajectory stat.ML

Longitudinal cohort studies produce repeated data that enable the assessment of time-varying association patterns between exposures and health outcomes. Classical linear mixed-effects models (LMMs) can accommodate a large variety of association patterns while accounting for the irregularly spaced, partially observed measurement. But they require the analyst to pre-specify the functional form linking the exposure history to the outcome. We propose the Neural ODE-LMM, which embeds a Neural Ordinary Differential Equation (Neural ODE) within the linear mixed-effects framework: a learned vector field encodes covariate trajectories into a continuous-time latent state that drives both the fixed- and random-effect design, while preserving the standard LMM observation model. This retains classical likelihood-based inference while learning complex, potentially cumulative, covariate effects flexibly. All parameters are estimated by maximising a penalised marginal likelihood. To quantify covariate effects, we introduce contrasts of counterfactual predictions that compare the expected outcome under alternative covariate trajectories with variance estimated via the delta method. In simulations, the model recovers both instantaneous and cumulative-burden effects without prior specification of the functional form. Applied to the Trois-Cités (3C) cohort, a population-based study of 7{,}324 participants, the method reveals trajectory-dependent associations of BMI and fasting glucose with cognitive decline.

A Deep Latent Variable Framework for Jointly Modeling Missingness, Measurement Error, and Heterogeneity stat.ML

Missing data, measurement error, and population heterogeneity are pervasive challenges in analyzing data arising from modern observational studies and machine learning applications. Although these problems frequently coexist and interact, they are often treated separately in existing works. We propose a unified probabilistic framework that jointly addresses these issues utilizing deep latent variable representation. The proposed method integrates a novel hierarchical tree-routed variational autoencoder with pattern-aware latent representations and calibration-based denoising. The framework accommodates missing data mechanisms, including MCAR, MAR, and MNAR, while simultaneously learning subgroup-specific and globally shared latent structure. The introduced reconvergent routing mechanism enables selective parameters to be shared across related subpopulations, which offers flexibility as well as improved statistical efficiency. Simulation studies demonstrate substantial improvements over existing deep generative imputation approaches under complex heterogeneous missingness and measurement-error settings. The proposed framework provides a principled approach for learning from noisy and incomplete data in modern healthcare and other high-dimensional applications.

Learning Representations through Token Prediction: Geometry, Approximation, and Downstream Guarantees stat.ML

Token prediction is a central pre-training objective for modern language models. Despite its empirical success, why token prediction learns broadly useful representations remains incompletely understood. We develop a statistical framework connecting token prediction with representation geometry, encoder approximation, and downstream performance. Under a softmax prediction head, we show that accurate token prediction organizes token embeddings according to similarities between the distributions of contexts in which different token types appear, as measured by Hellinger distance, with explicit errors governed by prediction accuracy and token frequency. Meanwhile, the contextual representation provides a low-dimensional coordinate for the conditional distribution of the target token relative to these embeddings. We further introduce a self-consistency principle showing that repeated applications of a shared representation block can progressively refine the contextual representation without introducing additional block parameters. Among representations with the same prediction accuracy, this recurrent construction favors those that can be stably reconstructed from their contexts. Finally, we establish downstream guarantees for token generation, token community recovery, and classification by a linear probe, showing how prediction accuracy and recovered geometry translate into performance beyond the pre-training objective. Together, these results explain how the simple objective of predicting tokens can recover semantic geometry and produce broadly useful representations. A controlled simulation illustrates the theoretical mechanisms.

Fairness in multi-class multi-group classification problems via contextial coherent risk measures stat.ML

We propose a new design of fair classifiers for multi-class classification problems in the presence of vector-valued sensitive attributes. In that scenario each sensitive attribute has multiple values and forms several groups relevant to the fairness consideration. Naturally those groups are overlapping and one should also analyze the interaction of factors. Additionally, the decision makers aided by the classification should not violate individual rights at the expense of satisfying fairness metrics at the group level. We propose an approach using the theory and methods of coherent measures of risk aiming at resolving the fairness challenges. Further, we propose a specialized numerical method for solving the resulting optimization problem. The method scales well with the increase of the number of observations. Additionally, we note that the obtained classifier is robust with respect to corrupted data or to situation when data is scarce. We demonstrate the advantages of the proposed framework in comparison to the support-vector machine framework and other methods handling fairness.

Estimating Population-Risk Curves Along Nonconvex Gradient Flows from the Training Sample stat.ML

We estimate the conditional population-risk curve of a realized smooth nonconvex gradient flow from the training sample. Flow approximate leave-one-out (Flow-ALO) propagates a deletion response and evaluates omitted observations at approximate deleted paths. The risk-curve error decomposes into response approximation, exact-LOO fluctuation, and deletion-to-full risk transfer. On each fixed finite horizon, bounded centered training-loss gradients, a one-sided Hessian lower bound, locally Lipschitz Hessians, and a strict tube-closure condition yield an explicit $(n-1)^{-2}$ bound for the deletion-response error. Bounded evaluation-loss gradients transfer the deletion-response bound to the score without requiring the Hessian to be invertible. Direct first-order jackknife cancellation and exact-LOO concentration control deletion-to-full risk transfer and fluctuation, respectively, completing recovery of the conditional population-risk curve. For bounded smooth two-layer mean-field networks training both layers, the score-error bound is uniform in width.

Informative Label Missingness in Multiclass Classification Information Geometry and Excess Risk stat.ML

Informative label missingness can change the usual efficiency ordering between completely and partially labelled classifiers because the pattern of missing labels may itself carry information about the classification model. We develop a general likelihood-based theory for this phenomenon in parametric multiclass classification. An efficient-information decomposition separates information lost through unavailable class memberships from information contributed by the missing-label mechanism. We then derive a quadratic expansion of plug-in excess risk over the active pairwise faces of the multiclass Bayes boundary, showing that classification efficiency depends on how information gains and losses align with directions that perturb the decision boundary. This yields a classification-weighted generalized-eigenvalue criterion under which informative partial classification may have smaller asymptotic classification risk without globally dominating complete classification in Fisher information. Near missing completely at random, with the marginal missing-label proportion fixed, redistribution of missing labels changes lost class-label information at first order, whereas efficient information from the missingness pattern appears only at second order. Three-class quadratic discriminant calculations, finite-sample experiments, and a semi-synthetic multiclass application illustrate the resulting regime-dependent behaviour.

BenchmarksFull tables
Artificial AnalysisIntelligence Index

Composite score across coding, math, and reasoning

#ModelScoretok/s$/1M
1Claude Opus 4.861.460$10.94
2GPT-5.560.266$11.25
3Claude Opus 4.757.356$10.94
4Gemini 3.1 Pro Preview57.2132$4.50
5GPT-5.456.879$5.63
SWE-rebench

Agentic coding on real-world software engineering tasks

#ModelScore
1gpt-5.5-2026-04-23-xhigh62.7%
2Codex60.4%
3Claude Code59.6%
4gpt-5.5-2026-04-23-medium58.9%
5Claude Opus 4.8-xhigh56.4%