Out-analyzing analysts: OpenAI’s Deep Research pairs reasoning LLMs with agentic RAG to automate work

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Out-analyzing analysts: OpenAI’s Deep Research pairs reasoning LLMs with agentic RAG to automate work — and replace jobs

Join our daily and weekly newsletters for the latest updates and exclusive content on industry-leading AI coverage. Learn More Enterprise companies need to take note of OpenAI’s Deep Research. It provides a powerful product based on new capabilities, and is so good that it could put a lot of people out of jobs. Deep Research […]

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Enterprise companies need to take note of OpenAI’s Deep Research. It provides a powerful product based on new capabilities, and is so good that it could put a lot of people out of jobs.

Deep Research is on the bleeding edge of a growing trend: integrating large language models (LLMs) with search engines and other tools to greatly expand their capabilities. (Just as this article was being reported, for example, Elon Musk’s xAI unveiled Grok 3, which claims similar capabilities, including a Deep Search product. However, it’s too early to assess Grok 3’s real-world performance, since most subscribers haven’t actually gotten their hands on it yet.)

OpenAI’s Deep Research, released on February 3, requires a Pro account with OpenAI, costing $200 per month, and is currently available only to U.S. users. So far, this restriction may have limited early feedback from the global developer community, which is typically quick to dissect new AI advancements.

With Deep Research mode, users can ask OpenAI’s leading o3 model any question. The result? A report often superior to what human analysts produce, delivered faster and at a fraction of the cost.

How Deep Research works

While Deep Research has been widely discussed, its broader implications have yet to fully register. Initial reactions praised its impressive research capabilities, despite its occasional hallucinations in its citations. There was the guy who said he used it to help his wife who had breast cancer. It provided deeper analysis than what her oncologists provided on how radiation therapy was the right course of action, he said. The consensus, summarized by Wharton AI professor Ethan Mollick, is that its advantages far outweigh occasional inaccuracies, as fact-checking takes less time than what the AI saves overall. This is something I agree with, based on my own usage.

Financial institutions are already exploring applications. BNY Mellon, for instance, sees potential in using Deep Research for credit risk assessments. Its impact will extend across industries, from healthcare to retail, manufacturing, and supply chain management — virtually any field that relies on knowledge work.

A smarter research agent

Unlike traditional AI models that attempt one-shot answers, Deep Research first asks clarifying questions. It might ask four or more questions to make sure it understands exactly what you want. It then develops a structured research plan, conducts multiple searches, revises its plan based on new insights, and iterates in a loop until it compiles a comprehensive, well-formatted report. This can take between a few minutes and half an hour. Reports range from 1,500 to 20,000 words, and typically include citations from 15 to 30 sources with exact URLs, at least according to my usage over the past week and a half.

The technology behind Deep Research: reasoning LLMs and agentic RAG

Deep Research does this by merging two technologies in a way we haven’t seen before in a mass-market product.

Reasoning LLMs: The first is OpenAI’s cutting-edge model, o3, which leads in logical reasoning and extended chain-of-thought processes. When it was announced in December 2024, o3 scored an unprecedented 87.5% on the super-difficult ARC-AGI benchmark designed to test novel problem-solving abilities. What’s interesting is that o3 hasn’t been released as a standalone model for developers to use. Indeed, OpenAI’s CEO Sam Altman announced last week that the model instead would be wrapped into a “unified intelligence” system, which would unite models with agentic tools like search, coding agents and more. Deep Research is an example of such a product. And while competitors like DeepSeek-R1 have approached o3’s capabilities (one of the reasons why there was so much excitement a few weeks ago), OpenAI is still widely considered to be slightly ahead.

Agentic RAG: The second, agentic RAG, is a technology that has been around for about a year now. It uses agents to autonomously seek out information and context from other sources, including searching the internet. This can include other tool-calling agents to find non-web information via APIs; coding agents that can complete complex sequences more efficiently; and database searches. Initially, OpenAI’s Deep Research is primarily searching the open web, but company leaders have suggested it would be able to search more sources over time.

OpenAI’s competitive edge (and its limits)

While these technologies are not entirely new, OpenAI’s refinements — enabled by things like its jump-start on working on these technologies, massive funding, and its closed-source development model — have taken Deep Research to a new level. It can work behind closed doors, and leverage feedback from the more than 300 million active users of OpenAI’s popular ChatGPT product. OpenAI has led in research in these areas, for example in how to do verification step by step to get better results. And it has clearly implemented search in an interesting way, perhaps borrowing from Microsoft’s Bing and other technologies.

While it is still hallucinating some results from its searches, it’s doing so less than competitors, perhaps in part because the underlying o3 model itself has set an industry low for these hallucinations at 8%. And there are ways to reduce mistakes still further, by using mechanisms like confidence thresholds, citation requirements and other sophisticated credibility checks.

At the same time, there are limits to OpenAI’s lead and capabilities. Within two days of Deep Research’s launch, HuggingFace introduced an open-source AI research agent called Open Deep Research that got results that weren’t too far off of OpenAI’s — similarly merging leading models and freely available agentic capabilities. There are few moats. Open-source competitors like DeepSeek appear set to stay close in the area of reasoning models, and Microsoft’s Magentic-One offers a framework for most of OpenAI’s agentic capabilities, to name just two more examples.

Furthermore, Deep Research has limitations. The product is really efficient at researching obscure information that can be found on the web. But in areas where there is not much online and where domain expertise is largely private — whether in peoples’ heads or in private databases — it doesn’t work at all. So this isn’t going to threaten the jobs of high-end hedge-fund researchers, for example, who are paid to go talk with real experts in an industry to find out otherwise very hard-to-obtain information, as Ben Thompson argued in a recent post (see graphic below). In most cases, OpenAI’s Deep Research is going to affect lower-skilled analyst jobs.

Deep Research’s value first increases as information online gets scarce, then drops off when it gets really scarce. Source: Stratechery.

The most intelligent product yet

When you merge top-tier reasoning with agentic retrieval, it’s not really surprising that you get such a powerful product. OpenAI’s Deep Research achieved 26.6% on Humanity’s Last Exam, arguably the best benchmark for intelligence. This is a relatively new AI benchmark designed to be the most difficult for any AI model to complete, covering 3,000 questions across 100 different subjects. On this benchmark, OpenAI’s Deep Research significantly outperforms Perplexity’s Deep Research (20.5%) and earlier models like o3-mini (13%) and DeepSeek-R1 (9.4%) that weren’t hooked up with agentic RAG. But early reviews suggest OpenAI leads in both quality and depth. Google’s Deep Research has yet to be tested against this benchmark, but early reviews suggest OpenAI leads in both quality and depth.

How it’s different: the first mass-market AI that could displace jobs

What’s different with this product is its potential to eliminate jobs. Sam Witteveen, cofounder of Red Dragon and a developer of AI agents, observed in a deep-dive video discussion with me that a lot of people are going to say: “Holy crap, I can get these reports for $200 that I could get from some top-4 consulting company that would cost me $20,000.” This, he said, is going to cause some real changes, including likely putting people out of jobs.

Which brings me back to my interview last week with Sarthak Pattanaik, head of engineering and AI at BNY Mellon, a major U.S. bank.

To be sure, Pattanaik didn’t say anything about the product’s ramifications for actual job counts at his bank. That’s going to be a particularly sensitive topic that any enterprise is probably going to shy away from addressing publicly. But he said he could see OpenAI’s Deep Research being used for credit underwriting reports and other “topline” activities, and having significant impact on a variety of jobs: “Now that doesn’t impact every job, but that does impact a set of jobs around strategy [and] research, like comparison vendor management, comparison of product A versus product B.” He added: “So I think everything which is more on system two thinking — more exploratory, where it may not have a right answer, because the right answer can be mounted once you have that scenario definition — I think that’s an opportunity.”

A historical perspective: job loss and job creation

Technological revolutions have historically displaced workers in the short term while creating new industries in the long run. From automobiles replacing horse-drawn carriages to computers automating clerical work, job markets evolve. New opportunities created by the disruptive technologies tend to spawn new hiring. Companies that fail to embrace these advances will fall behind their competitors.

OpenAI’s Altman acknowledged the link, even if indirect, between Deep Research and labor. At the AI Summit in Paris last week, he was asked about his vision for artificial general intelligence (AGI), or the stage at which AI can perform pretty much any task that a human can. As he answered, his first reference was to Deep Research: “It’s a model I think is capable of doing like a low-single-digit percentage of all the tasks in the economy in the world right now, which is a crazy statement, and a year ago I don’t think something that people thought is going to be coming.” (See minute three of this video). He continued: “For 50 cents of compute, you can do like $500 or $5,000 of work. Companies are implementing that to just be way more efficient.”

The takeaway: a new era for knowledge work

Deep Research represents a watershed moment for AI in knowledge-based industries. By integrating cutting-edge reasoning with autonomous research capabilities, OpenAI has created a tool that is smarter, faster and significantly more cost-effective than human analysts.

The implications are vast, from financial services to healthcare to enterprise decision-making. Organizations that leverage this technology effectively will gain a significant competitive edge. Those that ignore it do so at their peril.

For a deeper discussion on how OpenAI’s Deep Research works, and how it is reshaping knowledge work, check out my in-depth conversation with Sam Witteveen in our latest video:

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Today we provide a comprehensive roundup of the latest industry analyst reports from CBRE, PwC, and Synergy Research, offering a data-driven perspective on the state of the North American data center market. To wit, CBRE’s latest findings highlight record-breaking growth in supply, soaring colocation pricing, and mounting power constraints shaping site selection. For its part, PwC’s analysis underscores the sector’s broader economic impact, quantifying its trillion-dollar contribution to GDP, rapid job growth, and surging tax revenues. Meanwhile, the latest industry analysis from Synergy Research details the acceleration of cloud spending, AI’s role in fueling infrastructure demand, and an unprecedented surge in data center mergers and acquisitions. Together, these reports paint a picture of an industry at an inflection point—balancing explosive expansion with evolving challenges in power availability, cost pressures, and infrastructure investment. Let’s examine them. CBRE: Surging Demand Fuels Record Data Center Expansion CBRE says the North American data center sector is scaling at an unprecedented pace, driven by unrelenting demand from artificial intelligence (AI), hyperscale, and cloud service providers. The latest North America Data Center Trends H2 2024 report from CBRE reveals that total supply across primary markets surged by 34% year-over-year to 6,922.6 megawatts (MW), outpacing the 26% growth recorded in 2023. This accelerating expansion has triggered record-breaking construction activity and intensified competition for available capacity. Market Momentum: Scaling Amid Power Constraints According to CBRE, data center construction activity reached historic levels, with 6,350 MW under development at the close of 2024—more than doubling the 3,077.8 MW recorded a year prior. Yet, the report finds the surge in development is being met with significant hurdles, including power constraints and supply chain challenges affecting critical electrical infrastructure. As a result, the vacancy rate across primary markets has plummeted to an all-time low of 1.9%, with only a handful of sites

Microsoft will invest $80B in AI data centers in fiscal 2025

And Microsoft isn’t the only one that is ramping up its investments into AI-enabled data centers. Rival cloud service providers are all investing in either upgrading or opening new data centers to capture a larger chunk of business from developers and users of large language models (LLMs). In a report published in October 2024, Bloomberg Intelligence estimated that demand for generative AI would push Microsoft, AWS, Google, Oracle, Meta, and Apple would between them devote $200 billion to capex in 2025, up from $110 billion in 2023. Microsoft is one of the biggest spenders, followed closely by Google and AWS, Bloomberg Intelligence said. Its estimate of Microsoft’s capital spending on AI, at $62.4 billion for calendar 2025, is lower than Smith’s claim that the company will invest $80 billion in the fiscal year to June 30, 2025. Both figures, though, are way higher than Microsoft’s 2020 capital expenditure of “just” $17.6 billion. The majority of the increased spending is tied to cloud services and the expansion of AI infrastructure needed to provide compute capacity for OpenAI workloads. Separately, last October Amazon CEO Andy Jassy said his company planned total capex spend of $75 billion in 2024 and even more in 2025, with much of it going to AWS, its cloud computing division.

John Deere unveils more autonomous farm machines to address skill labor shortage

Join our daily and weekly newsletters for the latest updates and exclusive content on industry-leading AI coverage. Learn More Self-driving tractors might be the path to self-driving cars. John Deere has revealed a new line of autonomous machines and tech across agriculture, construction and commercial landscaping. The Moline, Illinois-based John Deere has been in business for 187 years, yet it’s been a regular as a non-tech company showing off technology at the big tech trade show in Las Vegas and is back at CES 2025 with more autonomous tractors and other vehicles. This is not something we usually cover, but John Deere has a lot of data that is interesting in the big picture of tech. The message from the company is that there aren’t enough skilled farm laborers to do the work that its customers need. It’s been a challenge for most of the last two decades, said Jahmy Hindman, CTO at John Deere, in a briefing. Much of the tech will come this fall and after that. He noted that the average farmer in the U.S. is over 58 and works 12 to 18 hours a day to grow food for us. And he said the American Farm Bureau Federation estimates there are roughly 2.4 million farm jobs that need to be filled annually; and the agricultural work force continues to shrink. (This is my hint to the anti-immigration crowd). John Deere’s autonomous 9RX Tractor. Farmers can oversee it using an app. While each of these industries experiences their own set of challenges, a commonality across all is skilled labor availability. In construction, about 80% percent of contractors struggle to find skilled labor. And in commercial landscaping, 86% of landscaping business owners can’t find labor to fill open positions, he said. “They have to figure out how to do

2025 playbook for enterprise AI success, from agents to evals

Join our daily and weekly newsletters for the latest updates and exclusive content on industry-leading AI coverage. Learn More 2025 is poised to be a pivotal year for enterprise AI. The past year has seen rapid innovation, and this year will see the same. This has made it more critical than ever to revisit your AI strategy to stay competitive and create value for your customers. From scaling AI agents to optimizing costs, here are the five critical areas enterprises should prioritize for their AI strategy this year. 1. Agents: the next generation of automation AI agents are no longer theoretical. In 2025, they’re indispensable tools for enterprises looking to streamline operations and enhance customer interactions. Unlike traditional software, agents powered by large language models (LLMs) can make nuanced decisions, navigate complex multi-step tasks, and integrate seamlessly with tools and APIs. At the start of 2024, agents were not ready for prime time, making frustrating mistakes like hallucinating URLs. They started getting better as frontier large language models themselves improved. “Let me put it this way,” said Sam Witteveen, cofounder of Red Dragon, a company that develops agents for companies, and that recently reviewed the 48 agents it built last year. “Interestingly, the ones that we built at the start of the year, a lot of those worked way better at the end of the year just because the models got better.” Witteveen shared this in the video podcast we filmed to discuss these five big trends in detail. Models are getting better and hallucinating less, and they’re also being trained to do agentic tasks. Another feature that the model providers are researching is a way to use the LLM as a judge, and as models get cheaper (something we’ll cover below), companies can use three or more models to

OpenAI’s red teaming innovations define new essentials for security leaders in the AI era

Join our daily and weekly newsletters for the latest updates and exclusive content on industry-leading AI coverage. Learn More OpenAI has taken a more aggressive approach to red teaming than its AI competitors, demonstrating its security teams’ advanced capabilities in two areas: multi-step reinforcement and external red teaming. OpenAI recently released two papers that set a new competitive standard for improving the quality, reliability and safety of AI models in these two techniques and more. The first paper, “OpenAI’s Approach to External Red Teaming for AI Models and Systems,” reports that specialized teams outside the company have proven effective in uncovering vulnerabilities that might otherwise have made it into a released model because in-house testing techniques may have missed them. In the second paper, “Diverse and Effective Red Teaming with Auto-Generated Rewards and Multi-Step Reinforcement Learning,” OpenAI introduces an automated framework that relies on iterative reinforcement learning to generate a broad spectrum of novel, wide-ranging attacks. Going all-in on red teaming pays practical, competitive dividends It’s encouraging to see competitive intensity in red teaming growing among AI companies. When Anthropic released its AI red team guidelines in June of last year, it joined AI providers including Google, Microsoft, Nvidia, OpenAI, and even the U.S.’s National Institute of Standards and Technology (NIST), which all had released red teaming frameworks. Investing heavily in red teaming yields tangible benefits for security leaders in any organization. OpenAI’s paper on external red teaming provides a detailed analysis of how the company strives to create specialized external teams that include cybersecurity and subject matter experts. The goal is to see if knowledgeable external teams can defeat models’ security perimeters and find gaps in their security, biases and controls that prompt-based testing couldn’t find. What makes OpenAI’s recent papers noteworthy is how well they define using human-in-the-middle

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