The Inference Report

October 30, 2026

The fracture running through technology markets today is not about which company has the better model. It is about whose business model survives contact with the technology itself. Google's admission that AI search has drained 9.06 billion dollars from search cash flow exposes the central tension: the companies that built empires on one revenue stream are now cannibalizing it to stay relevant in the next one, and the math no longer works. Meanwhile, the venture market is bifurcating sharply. Series B funding hit multiyear highs in raw dollars while deal counts plunged, concentrating capital into fewer bets with clear integration paths into existing platforms or defensible applications. Thrive Holdings' 15.3 billion dollar acquisition of ADT backed by OpenAI and Wabi's 1.25 billion valuation after a 55 million dollar round illustrate the split: money flows to companies solving problems with specific economic leverage, not to generalist tools. The builders racing to automate formal verification, voice AI, and construction world models understand something the incumbents are learning painfully. You cannot sustain a business model by destroying the revenue it depends on.

Government is now weaponizing the one thing it still controls: borders and chips. Trump's threat to tariff foreign-made factory robots reverses two decades of manufacturing logic by making automation expensive and less accessible. Simultaneously, North Carolina's RFP explicitly requiring vendors to own their own frontier models is gatekeeping by procurement rule, favoring companies with the most capital and longest training timelines. These moves concentrate power even as they claim to avoid vendor lock-in. Security vulnerabilities expose a parallel weakness. China's alleged efforts to steal Nvidia chips and a defense contractor's Accenture employee running a personal Claude agent on a Pentagon network reveal that the real vulnerability is not the technology itself but the people who deploy it behind firewalls they do not fully control.

OpenAI and the open ecosystem are diverging on how to manage this risk. OpenAI is layering safety infrastructure into its product roadmap while expanding into high-stakes professional services, packaging safety and liability management into premium workflows through partnerships like Ropes & Gray. Hugging Face and Mistral are moving in the opposite direction, shipping modular updatable models and open-source alternatives optimized for specific domains and edge devices. One strategy concentrates capability and liability in a vendor that understands frontier model risks. The other distributes models as infrastructure, letting others own the deployment risk. The research community is meanwhile building the measurement infrastructure to make both strategies work. Data attribution work, mechanistic decomposition of model behavior, and agentic systems that integrate retrieval planning and verification all cluster around a single principle: precision in measurement. Papers that succeed do so by specifying exactly what they evaluate per-token attribution, per-decision correctness, per-layer alignment rather than collapsing results into single scores. GitHub's trending repositories tell the story of where this infrastructure lands in practice. DeepTutor, Claude-mem, Superpowers, and Impeccable all solve the same core problem: agents forget. The distinction between them is architectural, but the pattern is universal. Persistent context systems are now table stakes. ExecutorCh, mflux, VelesDB, and Pixeltable handle on-device inference and multimodal orchestration, solving the unglamorous constraints that persist when the novelty wears off. Neither venture capital nor government policy nor research papers can force a business model to work. What they can do is accelerate the transition to whoever figures out the new one first.

Grant Calloway

AI LabsAll labs
From the WireAll feeds
Research PapersAll papers
Elucidating the Design Space of LM Data Attribution cs.CL

Data attribution methods for Language Models (LMs) are typically evaluated using downstream tasks like fact retrieval. However, existing evaluations vary multiple dataset properties simultaneously, making it impossible to isolate exactly why an attribution algorithm fails. To diagnose these failures, we explore the design space of LLM data attribution, with a primary focus on evaluation. We introduce the Controlled Attribution Benchmark (CATT) for fact tracing, in which we fine-tune LLMs on entirely fictitious knowledge, providing unambiguous ground truth for attribution. This synthetic setup allows us to systematically alter one dataset configuration at a time, such as document redundancy and lexical distractors. With this configurable evaluation, we demonstrate that redundancy and distractors consistently degrade attribution performance. Rather than proposing a new estimator, we examine two design choices that are underexplored: the loss used to compute gradients and how per-token attribution scores are aggregated into a document score. We find that the true causal evidence within a training document is highly localized, but standard methods dilute this evidence into noise by averaging attribution scores across the entire document. We find that replacing standard cross-entropy loss gradients with the negative log-odds gradients surfaces the critical tokens from other uninformative ones. We can then aggregate only the top token scores to improve ground truth recall by 35 to 72 percentage points across multiple baselines on our diagnostic benchmark. The negative log-odds correction also generalizes to FTRACE-TREX, improving counterfactual retraining performance for every method we test, by up to 4.9x.

Propose-Filter-Release: Scaling Noise to Typical Sensitivity via Private Filtering cs.LG

An estimator can be accurate and stable on typical data, yet sensitive to a few possible records. Differentially private mechanisms commonly scale their noise to the worst-case influence of a single record, which lets these records dictate the noise even when the remaining data would allow far less. Removing them first would restore the smaller scale, but the removal must itself be private. We introduce \emph{propose-filter-release} (PFR), which, by privately filtering its input, turns a mechanism that protects the addition or removal of a typical record, one that fits the remaining data, into one that is differentially private in the standard sense, on every input. Using our novel filtering step, PFR requires only a concave friendliness score, which measures how well a record fits a dataset, and a release mechanism that is friendly-DP, that is, private when the changed record fits the remaining data. For every such score and release mechanism, it guarantees differential privacy under public conditions on the number of records, so it is a general privacy primitive, comparable to propose-test-release, and FriendlyCore can be viewed as one of its implementations. We illustrate the generality of PFR by instantiating it for scalar statistics, principal subspace estimation, the KL divergence of user histograms, the effective resistances of a graph, and treatment-rule selection.

Rethinking Neural Thickets Without Weight Perturbations cs.LG

The Neural Thickets hypothesis posits that pretrained language models lie in dense neighborhoods of task-specific experts in weight space, which random Gaussian perturbations can uncover. We reproduce the reported gains, but show that they do not require this geometric explanation. Perturbing a single decoder block already recovers much of the improvement, while keeping the model entirely frozen and adding a random bias to its output logits matches or exceeds full-weight perturbations on most reasoning tasks. This suggests an alternative explanation based on output diversity, validation-based selection, and voting. We formalize this view as Perturb-Select-Vote (PSV), a general procedure that generates perturbed predictors, selects high-performing members on a small validation set, and aggregates their predictions. This interpretation connects Neural Thickets to established inference-time methods, including sampling, self-consistency, and verifier-guided selection. A first-order analysis further shows that small weight perturbations act primarily through their induced logit shifts. We extend this analysis to vision, where logit PSV substantially improves performance under domain shift, including on Earth observation, while full-weight perturbations provide little additional benefit. Together, these results suggest that the gains attributed to nearby weight-space experts can instead be obtained through output diversity, selection, and voting. Logit PSV realizes these benefits with a fully frozen model, providing a simple, training-free alternative to full-weight perturbation ensembles across language and vision.

Read, Allocate, Route: Role-Coupled Tokenization for Pixel-Space Generative Transformers cs.CV

Pixel-space generative Transformers typically use one token per image patch, so capturing finer detail requires more tokens and makes global attention increasingly expensive. We observe that finer detail does not necessarily require more global communication: low-frequency structure benefits from global exchange, while high-frequency detail can be modeled locally. Based on this insight, we introduce SpecSlot, a pixel-space rectified-flow Transformer that decouples output detail from the length of the global attention sequence. SpecSlot expands each spatial anchor into multiple slots, each assigned a disjoint band of DCT coefficients; this separates anchor density from spectral subdivision. Only the lowest-frequency slot from each anchor participates in global attention, while all slots interact locally. This allows the model to increase spectral detail without enlarging the global sequence. A spatial head further adds a local correction to the spectral prediction, while the generative state, target, and loss remain in pixel space. On ImageNet-256, SpecSlot achieves a comparable final FID to a FLOPs-matched JiT control while converging faster. On ImageNet-512, it improves FID by 2.84 over the control with 3.9% fewer FLOPs, and comes within only 0.69 FID of JiT-B/16 at 38.2% lower cost. On text-to-image generation, SpecSlot surpasses JiT-B/8 on DPG-Bench by 1.06 at 40.6% lower forward cost.

Adaptive Scenario Generation for KL-DRO Around a Learned Density Model eess.SY

Distributionally robust optimization (DRO) hedges data-driven two-stage stochastic programs against error in the distribution estimated from a finite record, and standard ambiguity sets differ in how they treat realizations absent from that record. A divergence ball around the empirical distribution contains only reweightings of the record, whereas a transport ball also contains distributions supported off the record, including on realizations the data-generating process cannot produce, against which the decision is then hedged as well. We instead propose a Kullback-Leibler (KL) ball centered at a density model fitted to the record, the learned nominal, which lets the adversary up-weight costly unobserved realizations in proportion to the probability the model assigns them. Solving the resulting problem poses a second difficulty, because it can accommodate only a few scenarios, and an independent sample of that size is likely to omit the rare realizations on which the worst case concentrates. We therefore build the scenario set adaptively, alternating between solving the finite problem and drawing new realizations from the learned nominal, steered toward the worst case at the current decision, with importance weights that correct the draws back to the model. On a multi-item newsvendor problem and a capacity expansion problem on realistic grid data, centering the ball at the learned nominal rather than at the record lowers cost under distribution shift, at comparable in-distribution cost, when the record is scarce and the model class captures structure that lets it extrapolate beyond the record. The advantage fades as the record grows or as the shift departs from the structure the model has learned.

Luggage re-identification: A study of strategies towards a real-world application cs.CV

Luggage re-identification (ReID) is a critical task in video surveillance for forensics, security or border management (suspicious or abandoned luggage recognition), as well as luggage management (lost luggage recovery). It enables the association of observations of the same luggage across disjoint camera views in complex environments such as airports, train stations and border crossing. While existing approaches primarily focus on appearance-based cropped image matching under relatively clean conditions, real-world scenarios are characterized by frequent occlusions, cluttered background and crowded scenes which significantly degrade performance. Yet, strategies leveraging the complementarity of multiple shots and views from different video streams is overlooked. In this paper, we study strategies for an end-to-end pipeline that operates from multiple video streams to detect and re-identify luggage. We evaluate different variants on a benchmark dataset acquired in real-world environments to address the questions of selecting and merging different views and shots of the same luggage as well as training on different environment datasets for an overall ReID performance improvement in practical applications.

BenchmarksFull tables
Artificial AnalysisIntelligence Index

Composite score across coding, math, and reasoning

#ModelScoretok/s$/1M
1Gemini 4 Carbon59.488$8.00
2Claude Opus 5.558.497$8.00
3GPT-6 Astra56.989$20.00
4GPT-6.1 Sol54.589$4.00
5Claude Sonnet 5.554.2134$4.00
SWE-rebench

Agentic coding on real-world software engineering tasks

#ModelScore
1AnthropicFable 5 [high]Model64.5%± 1.41%
2GrokGrok 4.5 [high]Model63.8%± 0.60%
3AnthropicOpus 5 [high]Model63.4%± 1.35%
4Z.aiGLM-5.2 [high]Model62.9%± 1.19%
5OpenAIGPT-5.6 Sol [medium]Model62.3%± 1.83%