The Inference Report

July 11, 2026

Across AI development and deployment this week, a single pressure is reshaping competition: the cost of operation is outpacing the cost of capability. Meta's Muse Spark 1.1 is undercutting OpenAI and Anthropic on API pricing while matching Claude Opus 4.8 and GPT-5.5 on agentic benchmarks. OpenAI launched ChatGPT Work and is rolling out GPT-5.6 with claims of lower operating costs. Mistral entered robotics with a single RGB camera instead of depth sensors and LiDAR, trading sensor complexity for algorithmic efficiency. Meanwhile, enterprises are discovering that AI token costs run 10 to 20 times higher than projected, and capital is flowing toward infrastructure rather than toward the companies that rent models. SK Hynix just raised $26.5 billion in the largest foreign IPO in US history, with the market already asking Samsung and SK Hynix to build US fabs. The question is no longer which company has the best frontier model. The question is which company can deliver capability cheaply enough to justify adoption.

Regulation and user friction are simultaneously pushing closed platforms toward openness. Meta faces EU fines for autoplay and infinite scroll while backing away from its AI image generation feature after user pushback, revealing a company suddenly responsive to friction it once ignored. Open source is no longer fringe: Hugging Face now serves roughly half the Fortune 500 as a distribution platform for models and datasets. Companies are done renting their AI because the rental model assumes lock-in, and open alternatives now exist with enough capability to matter. Prompt injection attacks are proliferating across five new techniques that CrowdStrike has catalogued, and data exfiltration through seemingly benign agent actions is now a documented threat. In this environment, the company with the most defensible moat is the one that controls the chips, not the one that controls the API.

GitHub's post-mortem on Copilot code review exposes the operational reality underneath capability claims. Migrating to Unix-style code exploration tools and reshaping agent workflows around pull request evidence reduced costs by forcing the system to reason over actual evidence rather than hallucinate context. The trending GitHub repos reveal developers recognizing that agent capability scales through composition, not through better prompts: repos like obra/superpowers and mattpocock/skills have accumulated massive star counts because they solve a real coordination problem, offering reusable abstractions over terminal control, file operations, and office automation. Agents are moving from proof-of-concept to production, which means people are now paying attention to cost, observability, and integration quality. The SWE-rebench rankings show no movement in the top tier, with OpenAI's gpt-5.5 remaining at 62.7 percent, suggesting either that the controlled coding task environment has stabilized or that the evaluation window was too brief to detect meaningful change. Neither announcement is about capability breakthrough. Both are about operational reality catching up to initial hype.

Grant Calloway

AI LabsAll labs
From the WireAll feeds
Research Papers — FocusedAll papers
Kernel-based Operator Learning: Error Analysis, Budget Allocation, and a Physics-Informed Extension math.NA

We study kernel-based operator learning in a two-stage sampling framework, where an offline kernel regression operator learns a discretized representation of the target operator from input-output pairs and an online kernel reconstruction operator recovers the output function from predicted observations. Our main theoretical contribution is an explicit budget allocation condition relating the number $N$ of training pairs, the number $n$ of input observations, and the output resolution $m$. The condition is derived from a coupled error analysis that interprets the surrogate as a reconstruction from approximate data. This yields a decomposition of the total error into reconstruction and learning contributions that can be analyzed independently. As a consequence, we obtain quantitative scaling laws describing how $N$, $n$, and $m$ must be coupled to guarantee convergence and to balance offline learning and online reconstruction errors. The resulting estimates extend previous analyses of kernel-based operator learning. We further introduce a physics-informed extension that incorporates knowledge of the underlying PDE at evaluation time. Rather than encoding constraints directly into the kernel, we augment the online reconstruction step by penalizing PDE residuals at collocation points. The method requires no retraining for new inputs. Numerical experiments illustrate the theoretical findings and demonstrate the effectiveness of the proposed physics-informed reconstruction strategy.

Online TT-ALS for Streaming Tensor Decomposition with Incremental Orthogonalization math.NA

Tensor Train (TT) decomposition is a powerful technique for analyzing high-dimensional data. Existing algorithms for computing TT decompositions can be categorized into two main types: conventional batch-based approaches and recursive online methods. In the context of streaming data, batch methods typically achieve higher reconstruction accuracy but often suffer from memory exhaustion, while online methods provide greater computational efficiency. In this work, we introduce Online TT-ALS (Alternating Least Squares), an algorithm that sequentially enforces orthogonality constraints. This approach allows for efficient and exact updates of the core tensor while maintaining high reconstruction accuracy. Theoretically, we prove that enforcing these orthogonal gauge constraints guarantees monotonic decrease of the local objective function and temporal smoothness. Computationally, our deterministic single-sweep update reduces the rank dependence from quadratic to linear, achieving an overall complexity of $\mathcal{O}(I^{n-1} r)$. Experimental results demonstrate that the proposed method outperforms existing online techniques not only in terms of mathematical approximation accuracy but also in human perception-based video quality metrics. Furthermore, compared to recent deep learning-based paradigms, our algebraic approach achieves speedups of several orders of magnitude. Consequently, our method exhibits high computational efficiency and is suitable for low-latency real-time processing applications.

Domain-Decomposed Randomized Neural Networks for Partial Differential Equations in Unbounded Domains math.NA

Partial differential equations on unbounded domains are challenging because the exterior region must be represented without excessive truncation error. Truncation-based methods often require problem-dependent artificial boundary conditions, while global spectral bases may be inefficient for localized structures, irregular geometries, or solutions with different near-field and far-field behaviors. We propose a domain-decomposed randomized neural network framework for such problems. Different randomized subnetworks are assigned to different spatial regimes: a near-field subnetwork captures local and geometric features, whereas a far-field subnetwork represents exterior decay. The subnetworks are coupled by boundary and interface conditions, and only the output-layer coefficients are solved from linear least-squares systems arising from Petrov--Galerkin or collocation formulations. We develop a Petrov--Galerkin method for semi-unbounded elliptic problems and a collocation method for fully unbounded, perforated, and time-dependent problems. A conditional bounded-parameter approximation result is proved in a broken Sobolev norm, together with an error decomposition covering approximation, empirical-consistency/quadrature, and least-squares optimization errors. Numerical experiments for Poisson and time-dependent Schrödinger equations demonstrate the accuracy and flexibility of the proposed method.

Residual-Guided Dictionary Learning for Spectrally Accurate Koopman Approximation math.NA

Koopman theory promises linear structure in nonlinear dynamics, but numerical Koopman spectra are easy to compute and hard to trust. A finite EDMD matrix always has eigenvalues; the problem is that many of them may have nothing to do with the infinite-dimensional operator. In this paper we make spectral reliability the objective of dictionary learning. We train neural-network dictionaries not merely to predict the next snapshot, but to minimize Residual Dynamic Mode Decomposition residuals: operator-level a posteriori errors that test whether computed eigenvalues and modes are genuine Koopman spectral objects. To keep the learned observables from collapsing into an unstable coordinate system, the loss also penalizes the condition number of the lifted data matrix. Thus the method couples two requirements that should not be separated: small Koopman residuals and a well-conditioned representation. The result is a learned dictionary that is expressive, numerically stable, and spectrally disciplined. Across conservative and dissipative benchmark systems, the method sharply reduces spectral pollution, improves residual pseudospectral inclusion, and lowers forecast error relative to standard fixed dictionaries. On sea-surface temperature data, it gives cleaner Koopman diagnostics and substantially better one-step forecasts from noisy observations with no governing equations. The message is simple: neural Koopman learning should be judged not by prediction alone, but by whether its spectral claims can be certified. Residuals provide the certificate; conditioning makes it computable.

Fourier Neural Operators with Least-Squares Readout Refit for Learning Random Obstacle-to-Solution Maps math.NA

We study operator learning for random obstacle-to-solution maps arising from elliptic variational inequalities with finite-band self-affine random obstacle fields. Instead of introducing an explicit truncated stochastic parametrization of the random input, we learn the map directly from sampled obstacle realizations on a fixed grid. This problem is challenging because the solution is governed not only by the obstacle field itself, but also by the induced contact set and free-boundary geometry. We introduce a post-training least-squares readout refit for the Fourier neural operator (FNO). After the FNO is trained end to end, its nonlinear backbone is frozen and the final affine readout is recomputed by solving the induced linear least-squares problem over all training samples and grid points. The refit yields the empirical squared-error optimal readout for the learned frozen features while leaving the nonlinear representation unchanged. We compare vanilla DeepONet, POD-DeepONet, a two-stage DeepONet baseline, FNO, and FNO with least-squares readout refit (FNO-LS) on two obstacle ensembles with different amplitude levels. Numerical results show that FNO-LS achieves the strongest overall performance among the tested models, particularly for higher-amplitude obstacles with more complex contact geometry. The method improves average field accuracy, contact-set recovery, and obstacle-violation metrics at low additional cost, especially when the FNO backbone is informative but not fully converged. These results suggest that least-squares readout refit is a simple and effective post-training enhancement for learning random obstacle-to-solution maps.

Implementation of Hyperelastic Physics-Augmented Neural Networks in the Explicit Finite Element Codes Simcenter Radioss and OpenRadioss with Applications to Impact Events math.NA

Data-driven material modeling techniques have gained significant attention due to their ability to capture complex constitutive behaviors beyond the limitations of classical material models. Physics-augmented neural networks (PANNs), which embed physical constraints directly into their architecture, combine the flexibility of machine learning with the reliability required for engineering simulations. This work presents an approach to integrate such network architectures into the explicit finite element solvers Simcenter Radioss and OpenRadioss (Siemens). A framework for transferring pretrained network architectures and their parameters to a standalone user material routine is developed. Networks are trained using PyTorch, though the procedure can be adapted to other frameworks such as TensorFlow, enabling the use of PANNs within existing finite element technology without requiring specialized solvers. Particular emphasis is placed on computational efficiency. The influence of network architecture on simulation performance is investigated, and strategies for reducing evaluation costs while preserving accuracy are discussed. Specifically, replacing the SoftPlus activation function with SQuarePlus is shown to reduce computational cost. A publicly available GitHub repository automates the generation of Fortran user material routines, requiring only the specification of the network architecture and trained parameters. An example impact simulation demonstrates that the generated PANN user material reproduces the nonlinear behavior characteristic of hyperelastic materials under large strains, providing a practical route toward machine-learning-based constitutive models in explicit finite element simulations.

BenchmarksFull tables
Artificial AnalysisIntelligence Index

Composite score across coding, math, and reasoning

#ModelScoretok/s$/1M
1Claude Fable 559.972$20.00
2GPT-5.6 Sol58.992$11.25
3Claude Opus 4.855.757$10.00
4GPT-5.6 Terra55178$5.63
5GPT-5.554.864$11.25
SWE-rebench

Agentic coding on real-world software engineering tasks

#ModelScore
1OpenAIgpt-5.5-2026-04-23-xhighModel62.7%± 0.91%
2JunieJunieAgent61.6%± 0.64%
3OpenAICodexAgent60.4%± 1.37%
4AnthropicClaude CodeAgent59.6%± 1.98%
5OpenAIgpt-5.5-2026-04-23-mediumModel58.9%± 0.78%