The Inference Report

July 13, 2026

The market is signaling a hard correction on AI spending. DoorDash, Siemens, and Airbnb are actively migrating workloads to cheaper Chinese models, a direct rejection of the premium pricing that US-based systems commanded when the productivity story still held. Employers who championed AI adoption are reversing course as actual bills arrive, suggesting the gap between promised ROI and realized gains has become impossible to ignore. Even well-capitalized companies are shopping around. This isn't skepticism about the technology itself; it's skepticism about whether the first wave of deployments justified their cost. The conversation has shifted from capability to price, and markets always tell the truth when they stop paying.

What fills the vacuum left behind is compliance work with no direct revenue case. Red teaming frameworks, auditing techniques for malicious capabilities, federal monitoring infrastructure, these accumulate as real costs that either get underfunded or become regulatory requirements. Research is meanwhile fragmenting into specialized domains: topological methods for interpretability, activation-level error detection to surface where models diverge from their outputs, dynamic routing schemes that treat inference as adaptive orchestration rather than monolithic forward pass. The pattern across papers privileges decomposability over black-box optimization, a tacit acknowledgment that the next phase requires transparency.

On the build side, GitHub shows a clear bifurcation. One track is agents with direct system access, DesktopCommanderMCP, trading platforms, home automation, solving the genuine problem that developers want models to act on the world. The other is infrastructure: vLLM-Ascend adding hardware support, beam-cloud/beta9 tackling serverless GPU scheduling, Prefect handling resilient task coordination. The traction has moved past "can we build agents" to "how do we make them reliable and safe enough for production." Working examples beat abstract documentation. This is where engineering effort is actually flowing, and it reflects a market that has learned to distinguish between capability and operational reality.

Grant Calloway

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From the WireAll feeds
Research PapersAll papers
PHINN-EEG: Topological Time-Series Analysis of Dream-State EEG -- Dynamic Betti Curves for Dream Content Classification and Topology-Conditioned Neural Signal Synthesis q-bio.NC

Current electroencephalography (EEG)-based dream detection relies on power spectral density (PSD) and statistical moment features, achieving a state-of-the-art area under the receiver operating characteristic curve (AUC) of approximately 0.70 on the DREAM database (Wong et al., 2025, Nature Communications). We introduce PHINN-EEG (Persistent Homology Inspired Neural Network for EEG), the first topological time-series framework for dream mentation analysis. Using sliding-window Takens delay embeddings and Vietoris-Rips filtrations on multichannel pre-awakening EEG epochs, we extract Dynamic Betti Curves that characterize the geometric architecture of neural activity, not merely its energy. These topological invariants, combined with topology-conditioned flow matching, are analytically projected to outperform existing PSD and catch22 benchmarks, targeting AUC = 0.82-0.90 on the 1,462-awakening open-access subset of the DREAM database (drawn from a full registry of 3,191 total awakenings from 263 participants across 20 independent laboratories). We further introduce a topology-conditioned rectified flow model for dream-state EEG synthesis-with a spectral-conditioned flow model of comparable feature dimensionality as an additional ablation baseline to isolate the value of topological conditioning specifically-and propose a set of candidate Betti transition archetypes linking topology to phenomenological dream report categories, presented as an exploratory hypothesis space pending empirical validation. If validated, this work represents a paradigm shift from spectral energy to phase-space geometry in neural rare-event detection, with potential future implications for wearable BCI dream monitoring.

Scalable Visual Pretraining for Language Intelligence cs.CV

The rapid progress of large foundation models has been driven predominantly by pretraining on large-scale text corpora. However, many forms of knowledge are conveyed through visual representations, where figures, typeset equations, and page layouts carry rich information that cannot be faithfully or completely captured by text alone. Yet current pretraining approaches discard these visual cues by converting visually rich sources, such as documents and web pages, into plain text for learning language intelligence. This paper challenges the default assumption that language models must be trained on text-only representations and shows that Visual Pretraining is a scalable learner for foundation model intelligence. To this end, we conduct a systematic study of unsupervised visual pretraining paradigms that directly leverage visual documents without text extraction. Across multiple backbones and benchmarks, visual pretraining on the same underlying corpora consistently outperforms text-only pretraining, offering an efficient pathway to scalable language intelligence.

Evolution of Accuracy and Visual-Cognitive Errors in a Decade of Vision-Language AI Models cs.CV

Vision language models (VLMs) have made remarkable progress in visual reasoning during the last decade. Most evaluations have used simple scenes (MS-COCO) that do not showcase complex human interactions or behaviors, only a handful of non-curated human descriptions as a benchmark, and have not focused on understanding the model's error types. Here, we introduce the Complex Social Behavior (CSB) dataset, containing 100 images depicting complex social interactions/behaviors. We analyze the progression of scene descriptions over a decade (2017-2025) of VLMs (four pre-Multimodal Large Language Models, MLLMs, and five MLLMs). We evaluate the accuracy of the models and 20 human descriptions relative to a gold standard on the CSB dataset and on a sample from MS-COCO. We analyzed five visual-cognitive error types: object detection, recognition, hallucination, scene understanding, and spatial dependence. The CSB dataset showed a more pronounced improvement than MS-COCO in scene description accuracy, with pre-MLLMs achieving much lower accuracy than the bottom-ranked human descriptions and MLLMs attaining accuracies similar to the top-ranked human descriptions. We show that MLLMs have eliminated the gap in scene description accuracy between simpler MS-COCO scenes and scenes depicting complex behaviors (CSB). MLLMs have almost eliminated all error types in our tested datasets, except for occasionally relying on different image regions for scene descriptions than humans do (spatial dependence error). We also show that detection, recognition, and hallucination errors have the highest impact on scene description accuracy. Together, our findings provide a more thorough evaluation of how visual language models have advanced over the last decade.

VEXAIoT: Autonomous IoT Vulnerability EXploitation using AI Agents cs.CR

Internet of Things (IoT) systems are inherently vulnerable due to constrained hardware, outdated firmware, and insecure default configurations, creating a need for scalable and adaptive security testing approaches. While recent adoptions of Large Language Model (LLM) agents have demonstrated promise in penetration testing and Capture-the-Flag (CTF) environments, their application to IoT specific vulnerabilities remains unexplored. This paper presents an autonomous multi-agent framework, referred to as Vulnerability EXploitation using AI Agents (VEXAIoT), for vulnerability discovery and exploitation in IoT environments using LLM-based reasoning and offensive security tools. The framework combines a vulnerability detection agent and an attack execution agent to perform reconnaissance, plan attack sequences, and execute exploits against vulnerable IoT services. The system is evaluated in IoTGoat and Metasploitable environments across ten attack scenarios mapped to OWASP IoT vulnerabilities. Experimental results show attack success rate of up to 100% with low token overhead and average execution times under two minutes for most attacks. Across 260 attack executions, VEXAIoT achieves a 95.0% overall success rate, including 94.5% success in IoTGoat and 96.7% success in Metasploitable2. These results demonstrate the potential for LLM-driven agents to automate IoT vulnerability assessment and offensive security workflows in controlled environments

ConceptSMILE: Auditing the Trustworthiness of Concept-Based Explainable AI cs.AI

Concept-based explainable artificial intelligence (AI) can make model reasoning more human-understandable, but concept-level outputs are not automatically trustworthy. We introduce ConceptSMILE, a model-agnostic perturbation-based auditing framework for evaluating the reliability of concept-based explanations. Rather than replacing SMILE, ConceptSMILE extends its perturbation-based logic from feature- or region-level attribution to the auditing of human-understandable concept explanations. The framework perturbs input regions, measures concept-response shifts, applies locality weighting, and fits an XGBoost surrogate to approximate local concept behaviour. Reliability is assessed through attribution accuracy, surrogate fidelity, faithfulness, stability, and consistency. We evaluate ConceptSMILE on retinal fundus images by comparing MedSAM-derived visual concepts with VLM-based semantic concepts. Results show that reliability varies across concepts and pathways: MedSAM achieves stronger spatial attribution and the highest surrogate fidelity ($R^2 = 0.8503$, $R_w^2 = 0.8465$), while the VLM pathway shows stronger vessel faithfulness and stronger stability under selected artefact conditions. ConceptSMILE provides an independent audit layer for evaluating the trustworthiness of concept-based XAI.

Deep Gaussian Processes on Directed Acyclic Graphs stat.ML

Many real-world processes can be represented as compositions of functions along a directed acyclic graph (DAG). In causal modelling, these correspond to the underlying mechanisms; in engineering, to multiple fidelity levels; and in gene-regulatory networks, to transcription factors. These functions are partially observed across the DAG, with noisy and heterogeneously sampled measurements, posing significant challenges for reconstruction, uncertainty propagation, and inference. To tackle these challenges, we place priors over functions and naturally arrive at Deep Gaussian Processes over DAGs. We theoretically study their prior-collapse behaviour, and the effect of graph topology and intermediate observations on the preservation of information. We obtain almost-sure lower bounds on the asymptotic frequency of depths at which the distinction between inputs is preserved, identify broad kernel classes for which these hold, and prove an observation by \cite{dunlop2018} on the role of input connections. We offer a structured variational approximation that retains graph dependencies, preserves compositional uncertainty, and captures the explaining-away behaviour of colliders. Finally, we empirically validate our theoretical results and our methodology, and model a latent-collider DAG, a protein signalling network, and a multi-fidelity heavy-ion collision emulation task, attaining state-of-the-art performance while recovering low-fidelity contributions and yielding interpretability of the simulator hierarchy.

BenchmarksFull tables
Artificial AnalysisIntelligence Index

Composite score across coding, math, and reasoning

#ModelScoretok/s$/1M
1Claude Fable 559.968$20.00
2GPT-5.6 Sol58.990$11.25
3Claude Opus 4.855.761$10.00
4GPT-5.6 Terra55172$5.63
5GPT-5.554.881$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%