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Overcome Failing Document Ingestion & RAG Strategies with Agentic Knowledge Distillation

Introduction Many generative AI use cases still revolve around Retrieval Augmented Generation (RAG), yet consistently fall short of user expectations. Despite the growing body of research on RAG improvements and even adding Agents into the process, many solutions still fail to return exhaustive results, miss information that is critical but infrequently mentioned in the documents, require multiple search iterations, and generally struggle to reconcile key themes across multiple documents. To top it all off, many implementations still rely on cramming as much “relevant” information as possible into the model’s context window alongside detailed system and user prompts. Reconciling all this information often exceeds the model’s cognitive capacity and compromises response quality and consistency. This is where our Agentic Knowledge Distillation + Pyramid Search Approach comes into play. Instead of chasing the best chunking strategy, retrieval algorithm, or inference-time reasoning method, my team, Jim Brown, Mason Sawtell, Sandi Besen, and I, take an agentic approach to document ingestion. We leverage the full capability of the model at ingestion time to focus exclusively on distilling and preserving the most meaningful information from the document dataset. This fundamentally simplifies the RAG process by allowing the model to direct its reasoning abilities toward addressing the user/system instructions rather than struggling to understand formatting and disparate information across document chunks.  We specifically target high-value questions that are often difficult to evaluate because they have multiple correct answers or solution paths. These cases are where traditional RAG solutions struggle most and existing RAG evaluation datasets are largely insufficient for testing this problem space. For our research implementation, we downloaded annual and quarterly reports from the last year for the 30 companies in the DOW Jones Industrial Average. These documents can be found through the SEC EDGAR website. The information on EDGAR is accessible and able to be downloaded for free or can be queried through EDGAR public searches. See the SEC privacy policy for additional details, information on the SEC website is “considered public information and may be copied or further distributed by users of the web site without the SEC’s permission”. We selected this dataset for two key reasons: first, it falls outside the knowledge cutoff for the models evaluated, ensuring that the models cannot respond to questions based on their knowledge from pre-training; second, it’s a close approximation for real-world business problems while allowing us to discuss and share our findings using publicly available data.  While typical RAG solutions excel at factual retrieval where the answer is easily identified in the document dataset (e.g., “When did Apple’s annual shareholder’s meeting occur?”), they struggle with nuanced questions that require a deeper understanding of concepts across documents (e.g., “Which of the DOW companies has the most promising AI strategy?”). Our Agentic Knowledge Distillation + Pyramid Search Approach addresses these types of questions with much greater success compared to other standard approaches we tested and overcomes limitations associated with using knowledge graphs in RAG systems.  In this article, we’ll cover how our knowledge distillation process works, key benefits of this approach, examples, and an open discussion on the best way to evaluate these types of systems where, in many cases, there is no singular “right” answer. Building the pyramid: How Agentic Knowledge Distillation works Image by author and team depicting pyramid structure for document ingestion. Robots meant to represent agents building the pyramid. Overview Our knowledge distillation process creates a multi-tiered pyramid of information from the raw source documents. Our approach is inspired by the pyramids used in deep learning computer vision-based tasks, which allow a model to analyze an image at multiple scales. We take the contents of the raw document, convert it to markdown, and distill the content into a list of atomic insights, related concepts, document abstracts, and general recollections/memories. During retrieval it’s possible to access any or all levels of the pyramid to respond to the user request.  How to distill documents and build the pyramid:  Convert documents to Markdown: Convert all raw source documents to Markdown. We’ve found models process markdown best for this task compared to other formats like JSON and it is more token efficient. We used Azure Document Intelligence to generate the markdown for each page of the document, but there are many other open-source libraries like MarkItDown which do the same thing. Our dataset included 331 documents and 16,601 pages.  Extract atomic insights from each page: We process documents using a two-page sliding window, which allows each page to be analyzed twice. This gives the agent the opportunity to correct any potential mistakes when processing the page initially. We instruct the model to create a numbered list of insights that grows as it processes the pages in the document. The agent can overwrite insights from the previous page if they were incorrect since it sees each page twice. We instruct the model to extract insights in simple sentences following the subject-verb-object (SVO) format and to write sentences as if English is the second language of the user. This significantly improves performance by encouraging clarity and precision. Rolling over each page multiple times and using the SVO format also solves the disambiguation problem, which is a huge challenge for knowledge graphs. The insight generation step is also particularly helpful for extracting information from tables since the model captures the facts from the table in clear, succinct sentences. Our dataset produced 216,931 total insights, about 13 insights per page and 655 insights per document. Distilling concepts from insights: From the detailed list of insights, we identify higher-level concepts that connect related information about the document. This step significantly reduces noise and redundant information in the document while preserving essential information and themes. Our dataset produced 14,824 total concepts, about 1 concept per page and 45 concepts per document.  Creating abstracts from concepts: Given the insights and concepts in the document, the LLM writes an abstract that appears both better than any abstract a human would write and more information-dense than any abstract present in the original document. The LLM generated abstract provides incredibly comprehensive knowledge about the document with a small token density that carries a significant amount of information. We produce one abstract per document, 331 total. Storing recollections/memories across documents: At the top of the pyramid we store critical information that is useful across all tasks. This can be information that the user shares about the task or information the agent learns about the dataset over time by researching and responding to tasks. For example, we can store the current 30 companies in the DOW as a recollection since this list is different from the 30 companies in the DOW at the time of the model’s knowledge cutoff. As we conduct more and more research tasks, we can continuously improve our recollections and maintain an audit trail of which documents these recollections originated from. For example, we can keep track of AI strategies across companies, where companies are making major investments, etc. These high-level connections are super important since they reveal relationships and information that are not apparent in a single page or document. Sample subset of insights extracted from IBM 10Q, Q3 2024 (page 4) We store the text and embeddings for each layer of the pyramid (pages and up) in Azure PostgreSQL. We originally used Azure AI Search, but switched to PostgreSQL for cost reasons. This required us to write our own hybrid search function since PostgreSQL doesn’t yet natively support this feature. This implementation would work with any vector database or vector index of your choosing. The key requirement is to store and efficiently retrieve both text and vector embeddings at any level of the pyramid.  This approach essentially creates the essence of a knowledge graph, but stores information in natural language, the way an LLM natively wants to interact with it, and is more efficient on token retrieval. We also let the LLM pick the terms used to categorize each level of the pyramid, this seemed to let the model decide for itself the best way to describe and differentiate between the information stored at each level. For example, the LLM preferred “insights” to “facts” as the label for the first level of distilled knowledge. Our goal in doing this was to better understand how an LLM thinks about the process by letting it decide how to store and group related information.  Using the pyramid: How it works with RAG & Agents At inference time, both traditional RAG and agentic approaches benefit from the pre-processed, distilled information ingested in our knowledge pyramid. The pyramid structure allows for efficient retrieval in both the traditional RAG case, where only the top X related pieces of information are retrieved or in the Agentic case, where the Agent iteratively plans, retrieves, and evaluates information before returning a final response.  The benefit of the pyramid approach is that information at any and all levels of the pyramid can be used during inference. For our implementation, we used PydanticAI to create a search agent that takes in the user request, generates search terms, explores ideas related to the request, and keeps track of information relevant to the request. Once the search agent determines there’s sufficient information to address the user request, the results are re-ranked and sent back to the LLM to generate a final reply. Our implementation allows a search agent to traverse the information in the pyramid as it gathers details about a concept/search term. This is similar to walking a knowledge graph, but in a way that’s more natural for the LLM since all the information in the pyramid is stored in natural language. Depending on the use case, the Agent could access information at all levels of the pyramid or only at specific levels (e.g. only retrieve information from the concepts). For our experiments, we did not retrieve raw page-level data since we wanted to focus on token efficiency and found the LLM-generated information for the insights, concepts, abstracts, and recollections was sufficient for completing our tasks. In theory, the Agent could also have access to the page data; this would provide additional opportunities for the agent to re-examine the original document text; however, it would also significantly increase the total tokens used.  Here is a high-level visualization of our Agentic approach to responding to user requests: Image created by author and team providing an overview of the agentic research & response process Results from the pyramid: Real-world examples To evaluate the effectiveness of our approach, we tested it against a variety of question categories, including typical fact-finding questions and complex cross-document research and analysis tasks.  Fact-finding (spear fishing):  These tasks require identifying specific information or facts that are buried in a document. These are the types of questions typical RAG solutions target but often require many searches and consume lots of tokens to answer correctly.  Example task: “What was IBM’s total revenue in the latest financial reporting?” Example response using pyramid approach: “IBM’s total revenue for the third quarter of 2024 was $14.968 billion [ibm-10q-q3-2024.pdf, pg. 4] Total tokens used to research and generate response This result is correct (human-validated) and was generated using only 9,994 total tokens, with 1,240 tokens in the generated final response.  Complex research and analysis:  These tasks involve researching and understanding multiple concepts to gain a broader understanding of the documents and make inferences and informed assumptions based on the gathered facts. Example task: “Analyze the investments Microsoft and NVIDIA are making in AI and how they are positioning themselves in the market. The report should be clearly formatted.” Example response: Response generated by the agent analyzing AI investments and positioning for Microsoft and NVIDIA. The result is a comprehensive report that executed quickly and contains detailed information about each of the companies. 26,802 total tokens were used to research and respond to the request with a significant percentage of them used for the final response (2,893 tokens or ~11%). These results were also reviewed by a human to verify their validity. Snippet indicating total token usage for the task Example task: “Create a report on analyzing the risks disclosed by the various financial companies in the DOW. Indicate which risks are shared and unique.” Example response: Part 1 of response generated by the agent on disclosed risks. Part 2 of response generated by the agent on disclosed risks. Similarly, this task was completed in 42.7 seconds and used 31,685 total tokens, with 3,116 tokens used to generate the final report.  Snippet indicating total token usage for the task These results for both fact-finding and complex analysis tasks demonstrate that the pyramid approach efficiently creates detailed reports with low latency using a minimal amount of tokens. The tokens used for the tasks carry dense meaning with little noise allowing for high-quality, thorough responses across tasks. Benefits of the pyramid: Why use it? Overall, we found that our pyramid approach provided a significant boost in response quality and overall performance for high-value questions.  Some of the key benefits we observed include:  Reduced model’s cognitive load: When the agent receives the user task, it retrieves pre-processed, distilled information rather than the raw, inconsistently formatted, disparate document chunks. This fundamentally improves the retrieval process since the model doesn’t waste its cognitive capacity on trying to break down the page/chunk text for the first time.  Superior table processing: By breaking down table information and storing it in concise but descriptive sentences, the pyramid approach makes it easier to retrieve relevant information at inference time through natural language queries. This was particularly important for our dataset since financial reports contain lots of critical information in tables.  Improved response quality to many types of requests: The pyramid enables more comprehensive context-aware responses to both precise, fact-finding questions and broad analysis based tasks that involve many themes across numerous documents.  Preservation of critical context: Since the distillation process identifies and keeps track of key facts, important information that might appear only once in the document is easier to maintain. For example, noting that all tables are represented in millions of dollars or in a particular currency. Traditional chunking methods often cause this type of information to slip through the cracks.  Optimized token usage, memory, and speed: By distilling information at ingestion time, we significantly reduce the number of tokens required during inference, are able to maximize the value of information put in the context window, and improve memory use.  Scalability: Many solutions struggle to perform as the size of the document dataset grows. This approach provides a much more efficient way to manage a large volume of text by only preserving critical information. This also allows for a more efficient use of the LLMs context window by only sending it useful, clear information. Efficient concept exploration: The pyramid enables the agent to explore related information similar to navigating a knowledge graph, but does not require ever generating or maintaining relationships in the graph. The agent can use natural language exclusively and keep track of important facts related to the concepts it’s exploring in a highly token-efficient and fluid way.  Emergent dataset understanding: An unexpected benefit of this approach emerged during our testing. When asking questions like “what can you tell me about this dataset?” or “what types of questions can I ask?”, the system is able to respond and suggest productive search topics because it has a more robust understanding of the dataset context by accessing higher levels in the pyramid like the abstracts and recollections.  Beyond the pyramid: Evaluation challenges & future directions Challenges While the results we’ve observed when using the pyramid search approach have been nothing short of amazing, finding ways to establish meaningful metrics to evaluate the entire system both at ingestion time and during information retrieval is challenging. Traditional RAG and Agent evaluation frameworks often fail to address nuanced questions and analytical responses where many different responses are valid. Our team plans to write a research paper on this approach in the future, and we are open to any thoughts and feedback from the community, especially when it comes to evaluation metrics. Many of the existing datasets we found were focused on evaluating RAG use cases within one document or precise information retrieval across multiple documents rather than robust concept and theme analysis across documents and domains.  The main use cases we are interested in relate to broader questions that are representative of how businesses actually want to interact with GenAI systems. For example, “tell me everything I need to know about customer X” or “how do the behaviors of Customer A and B differ? Which am I more likely to have a successful meeting with?”. These types of questions require a deep understanding of information across many sources. The answers to these questions typically require a person to synthesize data from multiple areas of the business and think critically about it. As a result, the answers to these questions are rarely written or saved anywhere which makes it impossible to simply store and retrieve them through a vector index in a typical RAG process.  Another consideration is that many real-world use cases involve dynamic datasets where documents are consistently being added, edited, and deleted. This makes it difficult to evaluate and track what a “correct” response is since the answer will evolve as the available information changes.  Future directions In the future, we believe that the pyramid approach can address some of these challenges by enabling more effective processing of dense documents and storing learned information as recollections. However, tracking and evaluating the validity of the recollections over time will be critical to the system’s overall success and remains a key focus area for our ongoing work.  When applying this approach to organizational data, the pyramid process could also be used to identify and assess discrepancies across areas of the business. For example, uploading all of a company’s sales pitch decks could surface where certain products or services are being positioned inconsistently. It could also be used to compare insights extracted from various line of business data to help understand if and where teams have developed conflicting understandings of topics or different priorities. This application goes beyond pure information retrieval use cases and would allow the pyramid to serve as an organizational alignment tool that helps identify divergences in messaging, terminology, and overall communication.  Conclusion: Key takeaways and why the pyramid approach matters The knowledge distillation pyramid approach is significant because it leverages the full power of the LLM at both ingestion and retrieval time. Our approach allows you to store dense information in fewer tokens which has the added benefit of reducing noise in the dataset at inference. Our approach also runs very quickly and is incredibly token efficient, we are able to generate responses within seconds, explore potentially hundreds of searches, and on average use

Introduction

Many generative AI use cases still revolve around Retrieval Augmented Generation (RAG), yet consistently fall short of user expectations. Despite the growing body of research on RAG improvements and even adding Agents into the process, many solutions still fail to return exhaustive results, miss information that is critical but infrequently mentioned in the documents, require multiple search iterations, and generally struggle to reconcile key themes across multiple documents. To top it all off, many implementations still rely on cramming as much “relevant” information as possible into the model’s context window alongside detailed system and user prompts. Reconciling all this information often exceeds the model’s cognitive capacity and compromises response quality and consistency.

This is where our Agentic Knowledge Distillation + Pyramid Search Approach comes into play. Instead of chasing the best chunking strategy, retrieval algorithm, or inference-time reasoning method, my team, Jim Brown, Mason Sawtell, Sandi Besen, and I, take an agentic approach to document ingestion.

We leverage the full capability of the model at ingestion time to focus exclusively on distilling and preserving the most meaningful information from the document dataset. This fundamentally simplifies the RAG process by allowing the model to direct its reasoning abilities toward addressing the user/system instructions rather than struggling to understand formatting and disparate information across document chunks. 

We specifically target high-value questions that are often difficult to evaluate because they have multiple correct answers or solution paths. These cases are where traditional RAG solutions struggle most and existing RAG evaluation datasets are largely insufficient for testing this problem space. For our research implementation, we downloaded annual and quarterly reports from the last year for the 30 companies in the DOW Jones Industrial Average. These documents can be found through the SEC EDGAR website. The information on EDGAR is accessible and able to be downloaded for free or can be queried through EDGAR public searches. See the SEC privacy policy for additional details, information on the SEC website is “considered public information and may be copied or further distributed by users of the web site without the SEC’s permission”. We selected this dataset for two key reasons: first, it falls outside the knowledge cutoff for the models evaluated, ensuring that the models cannot respond to questions based on their knowledge from pre-training; second, it’s a close approximation for real-world business problems while allowing us to discuss and share our findings using publicly available data. 

While typical RAG solutions excel at factual retrieval where the answer is easily identified in the document dataset (e.g., “When did Apple’s annual shareholder’s meeting occur?”), they struggle with nuanced questions that require a deeper understanding of concepts across documents (e.g., “Which of the DOW companies has the most promising AI strategy?”). Our Agentic Knowledge Distillation + Pyramid Search Approach addresses these types of questions with much greater success compared to other standard approaches we tested and overcomes limitations associated with using knowledge graphs in RAG systems. 

In this article, we’ll cover how our knowledge distillation process works, key benefits of this approach, examples, and an open discussion on the best way to evaluate these types of systems where, in many cases, there is no singular “right” answer.

Building the pyramid: How Agentic Knowledge Distillation works

AI-generated image showing a pyramid structure for document ingestion with labelled sections.
Image by author and team depicting pyramid structure for document ingestion. Robots meant to represent agents building the pyramid.

Overview

Our knowledge distillation process creates a multi-tiered pyramid of information from the raw source documents. Our approach is inspired by the pyramids used in deep learning computer vision-based tasks, which allow a model to analyze an image at multiple scales. We take the contents of the raw document, convert it to markdown, and distill the content into a list of atomic insights, related concepts, document abstracts, and general recollections/memories. During retrieval it’s possible to access any or all levels of the pyramid to respond to the user request. 

How to distill documents and build the pyramid: 

  1. Convert documents to Markdown: Convert all raw source documents to Markdown. We’ve found models process markdown best for this task compared to other formats like JSON and it is more token efficient. We used Azure Document Intelligence to generate the markdown for each page of the document, but there are many other open-source libraries like MarkItDown which do the same thing. Our dataset included 331 documents and 16,601 pages. 
  2. Extract atomic insights from each page: We process documents using a two-page sliding window, which allows each page to be analyzed twice. This gives the agent the opportunity to correct any potential mistakes when processing the page initially. We instruct the model to create a numbered list of insights that grows as it processes the pages in the document. The agent can overwrite insights from the previous page if they were incorrect since it sees each page twice. We instruct the model to extract insights in simple sentences following the subject-verb-object (SVO) format and to write sentences as if English is the second language of the user. This significantly improves performance by encouraging clarity and precision. Rolling over each page multiple times and using the SVO format also solves the disambiguation problem, which is a huge challenge for knowledge graphs. The insight generation step is also particularly helpful for extracting information from tables since the model captures the facts from the table in clear, succinct sentences. Our dataset produced 216,931 total insights, about 13 insights per page and 655 insights per document.
  3. Distilling concepts from insights: From the detailed list of insights, we identify higher-level concepts that connect related information about the document. This step significantly reduces noise and redundant information in the document while preserving essential information and themes. Our dataset produced 14,824 total concepts, about 1 concept per page and 45 concepts per document. 
  4. Creating abstracts from concepts: Given the insights and concepts in the document, the LLM writes an abstract that appears both better than any abstract a human would write and more information-dense than any abstract present in the original document. The LLM generated abstract provides incredibly comprehensive knowledge about the document with a small token density that carries a significant amount of information. We produce one abstract per document, 331 total.
  5. Storing recollections/memories across documents: At the top of the pyramid we store critical information that is useful across all tasks. This can be information that the user shares about the task or information the agent learns about the dataset over time by researching and responding to tasks. For example, we can store the current 30 companies in the DOW as a recollection since this list is different from the 30 companies in the DOW at the time of the model’s knowledge cutoff. As we conduct more and more research tasks, we can continuously improve our recollections and maintain an audit trail of which documents these recollections originated from. For example, we can keep track of AI strategies across companies, where companies are making major investments, etc. These high-level connections are super important since they reveal relationships and information that are not apparent in a single page or document.
Sample subset of insights extracted from IBM 10Q, Q3 2024
Sample subset of insights extracted from IBM 10Q, Q3 2024 (page 4)

We store the text and embeddings for each layer of the pyramid (pages and up) in Azure PostgreSQL. We originally used Azure AI Search, but switched to PostgreSQL for cost reasons. This required us to write our own hybrid search function since PostgreSQL doesn’t yet natively support this feature. This implementation would work with any vector database or vector index of your choosing. The key requirement is to store and efficiently retrieve both text and vector embeddings at any level of the pyramid. 

This approach essentially creates the essence of a knowledge graph, but stores information in natural language, the way an LLM natively wants to interact with it, and is more efficient on token retrieval. We also let the LLM pick the terms used to categorize each level of the pyramid, this seemed to let the model decide for itself the best way to describe and differentiate between the information stored at each level. For example, the LLM preferred “insights” to “facts” as the label for the first level of distilled knowledge. Our goal in doing this was to better understand how an LLM thinks about the process by letting it decide how to store and group related information. 

Using the pyramid: How it works with RAG & Agents

At inference time, both traditional RAG and agentic approaches benefit from the pre-processed, distilled information ingested in our knowledge pyramid. The pyramid structure allows for efficient retrieval in both the traditional RAG case, where only the top X related pieces of information are retrieved or in the Agentic case, where the Agent iteratively plans, retrieves, and evaluates information before returning a final response. 

The benefit of the pyramid approach is that information at any and all levels of the pyramid can be used during inference. For our implementation, we used PydanticAI to create a search agent that takes in the user request, generates search terms, explores ideas related to the request, and keeps track of information relevant to the request. Once the search agent determines there’s sufficient information to address the user request, the results are re-ranked and sent back to the LLM to generate a final reply. Our implementation allows a search agent to traverse the information in the pyramid as it gathers details about a concept/search term. This is similar to walking a knowledge graph, but in a way that’s more natural for the LLM since all the information in the pyramid is stored in natural language.

Depending on the use case, the Agent could access information at all levels of the pyramid or only at specific levels (e.g. only retrieve information from the concepts). For our experiments, we did not retrieve raw page-level data since we wanted to focus on token efficiency and found the LLM-generated information for the insights, concepts, abstracts, and recollections was sufficient for completing our tasks. In theory, the Agent could also have access to the page data; this would provide additional opportunities for the agent to re-examine the original document text; however, it would also significantly increase the total tokens used. 

Here is a high-level visualization of our Agentic approach to responding to user requests:

Overview of the agentic research & response process
Image created by author and team providing an overview of the agentic research & response process

Results from the pyramid: Real-world examples

To evaluate the effectiveness of our approach, we tested it against a variety of question categories, including typical fact-finding questions and complex cross-document research and analysis tasks. 

Fact-finding (spear fishing): 

These tasks require identifying specific information or facts that are buried in a document. These are the types of questions typical RAG solutions target but often require many searches and consume lots of tokens to answer correctly. 

Example task: “What was IBM’s total revenue in the latest financial reporting?”

Example response using pyramid approach: “IBM’s total revenue for the third quarter of 2024 was $14.968 billion [ibm-10q-q3-2024.pdf, pg. 4]

Screenshot of total tokens used to research and generate response
Total tokens used to research and generate response

This result is correct (human-validated) and was generated using only 9,994 total tokens, with 1,240 tokens in the generated final response. 

Complex research and analysis: 

These tasks involve researching and understanding multiple concepts to gain a broader understanding of the documents and make inferences and informed assumptions based on the gathered facts.

Example task: “Analyze the investments Microsoft and NVIDIA are making in AI and how they are positioning themselves in the market. The report should be clearly formatted.”

Example response:

Screenshot of the response generated by the agent analyzing AI investments and positioning for Microsoft and NVIDIA.
Response generated by the agent analyzing AI investments and positioning for Microsoft and NVIDIA.

The result is a comprehensive report that executed quickly and contains detailed information about each of the companies. 26,802 total tokens were used to research and respond to the request with a significant percentage of them used for the final response (2,893 tokens or ~11%). These results were also reviewed by a human to verify their validity.

Screenshot of snippet indicating total token usage for the task
Snippet indicating total token usage for the task

Example task: “Create a report on analyzing the risks disclosed by the various financial companies in the DOW. Indicate which risks are shared and unique.”

Example response:

Screenshot of part 1 of a response generated by the agent on disclosed risks.
Part 1 of response generated by the agent on disclosed risks.
Screenshot of part 2 of a response generated by the agent on disclosed risks.
Part 2 of response generated by the agent on disclosed risks.

Similarly, this task was completed in 42.7 seconds and used 31,685 total tokens, with 3,116 tokens used to generate the final report. 

Screenshot of a snippet indicating total token usage for the task
Snippet indicating total token usage for the task

These results for both fact-finding and complex analysis tasks demonstrate that the pyramid approach efficiently creates detailed reports with low latency using a minimal amount of tokens. The tokens used for the tasks carry dense meaning with little noise allowing for high-quality, thorough responses across tasks.

Benefits of the pyramid: Why use it?

Overall, we found that our pyramid approach provided a significant boost in response quality and overall performance for high-value questions. 

Some of the key benefits we observed include: 

  • Reduced model’s cognitive load: When the agent receives the user task, it retrieves pre-processed, distilled information rather than the raw, inconsistently formatted, disparate document chunks. This fundamentally improves the retrieval process since the model doesn’t waste its cognitive capacity on trying to break down the page/chunk text for the first time. 
  • Superior table processing: By breaking down table information and storing it in concise but descriptive sentences, the pyramid approach makes it easier to retrieve relevant information at inference time through natural language queries. This was particularly important for our dataset since financial reports contain lots of critical information in tables. 
  • Improved response quality to many types of requests: The pyramid enables more comprehensive context-aware responses to both precise, fact-finding questions and broad analysis based tasks that involve many themes across numerous documents. 
  • Preservation of critical context: Since the distillation process identifies and keeps track of key facts, important information that might appear only once in the document is easier to maintain. For example, noting that all tables are represented in millions of dollars or in a particular currency. Traditional chunking methods often cause this type of information to slip through the cracks. 
  • Optimized token usage, memory, and speed: By distilling information at ingestion time, we significantly reduce the number of tokens required during inference, are able to maximize the value of information put in the context window, and improve memory use. 
  • Scalability: Many solutions struggle to perform as the size of the document dataset grows. This approach provides a much more efficient way to manage a large volume of text by only preserving critical information. This also allows for a more efficient use of the LLMs context window by only sending it useful, clear information.
  • Efficient concept exploration: The pyramid enables the agent to explore related information similar to navigating a knowledge graph, but does not require ever generating or maintaining relationships in the graph. The agent can use natural language exclusively and keep track of important facts related to the concepts it’s exploring in a highly token-efficient and fluid way. 
  • Emergent dataset understanding: An unexpected benefit of this approach emerged during our testing. When asking questions like “what can you tell me about this dataset?” or “what types of questions can I ask?”, the system is able to respond and suggest productive search topics because it has a more robust understanding of the dataset context by accessing higher levels in the pyramid like the abstracts and recollections. 

Beyond the pyramid: Evaluation challenges & future directions

Challenges

While the results we’ve observed when using the pyramid search approach have been nothing short of amazing, finding ways to establish meaningful metrics to evaluate the entire system both at ingestion time and during information retrieval is challenging. Traditional RAG and Agent evaluation frameworks often fail to address nuanced questions and analytical responses where many different responses are valid.

Our team plans to write a research paper on this approach in the future, and we are open to any thoughts and feedback from the community, especially when it comes to evaluation metrics. Many of the existing datasets we found were focused on evaluating RAG use cases within one document or precise information retrieval across multiple documents rather than robust concept and theme analysis across documents and domains. 

The main use cases we are interested in relate to broader questions that are representative of how businesses actually want to interact with GenAI systems. For example, “tell me everything I need to know about customer X” or “how do the behaviors of Customer A and B differ? Which am I more likely to have a successful meeting with?”. These types of questions require a deep understanding of information across many sources. The answers to these questions typically require a person to synthesize data from multiple areas of the business and think critically about it. As a result, the answers to these questions are rarely written or saved anywhere which makes it impossible to simply store and retrieve them through a vector index in a typical RAG process. 

Another consideration is that many real-world use cases involve dynamic datasets where documents are consistently being added, edited, and deleted. This makes it difficult to evaluate and track what a “correct” response is since the answer will evolve as the available information changes. 

Future directions

In the future, we believe that the pyramid approach can address some of these challenges by enabling more effective processing of dense documents and storing learned information as recollections. However, tracking and evaluating the validity of the recollections over time will be critical to the system’s overall success and remains a key focus area for our ongoing work. 

When applying this approach to organizational data, the pyramid process could also be used to identify and assess discrepancies across areas of the business. For example, uploading all of a company’s sales pitch decks could surface where certain products or services are being positioned inconsistently. It could also be used to compare insights extracted from various line of business data to help understand if and where teams have developed conflicting understandings of topics or different priorities. This application goes beyond pure information retrieval use cases and would allow the pyramid to serve as an organizational alignment tool that helps identify divergences in messaging, terminology, and overall communication. 

Conclusion: Key takeaways and why the pyramid approach matters

The knowledge distillation pyramid approach is significant because it leverages the full power of the LLM at both ingestion and retrieval time. Our approach allows you to store dense information in fewer tokens which has the added benefit of reducing noise in the dataset at inference. Our approach also runs very quickly and is incredibly token efficient, we are able to generate responses within seconds, explore potentially hundreds of searches, and on average use (this includes all the search iterations!). 

We find that the LLM is much better at writing atomic insights as sentences and that these insights effectively distill information from both text-based and tabular data. This distilled information written in natural language is very easy for the LLM to understand and navigate at inference since it does not have to expend unnecessary energy reasoning about and breaking down document formatting or filtering through noise

The ability to retrieve and aggregate information at any level of the pyramid also provides significant flexibility to address a variety of query types. This approach offers promising performance for large datasets and enables high-value use cases that require nuanced information retrieval and analysis. 


Note: The opinions expressed in this article are solely my own and do not necessarily reflect the views or policies of my employer.

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Aggressive federal PQE timeline prompts warnings for enterprises

“The U.S. government’s EOs will likely spur accelerated intervention from all major governments and regional political blocs,” the firm said. “CISOs should be prepared for regulations to conflict and contain sovereignty requirements, which will complicate compliance.” Gartner recommends that companies build a PQC inventory and remediation program in 2026 and

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Presidential order addresses quantum computing gaps

By comparison, in AI, there are a number of benchmarks comparing AI models on everything from how well they do at math, to their ability to generate images, to whether they can find bugs in computer code. Benchmarks are important so that people can do fair comparisons of quantum systems,

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Equinor to invest in additional Troll development to boost European gas supply

Equinor Energy AS and partners will invest more than 4 billion krone ($400 million) in a new subsea development to increase gas production from Troll field in the North Sea. The Troll West Increased gas recovery North (TWIN) expansion—the third step of Troll Phase 3, which produces gas from the Troll West reservoir—could come online as early as 2028, said Gunnar Nakken, Equinor’s senior vice-president for projects and subsea Norway. TWIN is expected to contribute around 11 billion standard cu m of gas. “By simplifying, increasing standardization and reusing existing infrastructure and equipment, we are reducing costs and enabling faster production,” he said. Equinor aims to produce 1.3 million b/d from the Norwegian Continental Shelf (NCS) in 2035 to meet a portion of Europe’s energy needs. Troll field contains about 40% of NCS total gas reserves, with gas from Troll meeting around 10% of Europe’s gas needs. The TWIN project consists of two wells in a template and a pipeline connected to existing subsea infrastructure. The umbilical and MEG line will be extended to the new development. The second step of Troll Phase 3 is expected to come online this year, continuing production from Troll A platform, 80 km northwest of Bergen, Norway, and the Gassco-operated Kollsnes processing plant towards 2030, Equinor said. Equinor is operator of the project with 30.55% interest. Partners are Petoro AS (55.93%), A/S Norske Shell (8.19%), TotalEnergies EP Norge AS (3.69%), and ConocoPhillips Skandinavia AS (1.64%).

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Zululand Energy Terminal invites EPC expressions of interest

The proposed 7.5-million tonne/year (tpy) Zululand Energy Terminal (ZET) at the Port of Richards Bay, South Africa, has invited expressions of interest (EOI) from engineering, procurement and construction (EPC) contractors for development of planned LNG regasification infrastructure. Imported natural gas is expected to supply both industry and power generation. Phase 1 of the project will use a 170,000-cu m floating storage unit attached to 3 million tpy of onshore regasification capacity. Phase 2 will add 220,000 cu m of onshore storage (potentially replacing the FSU) and 4.5 million tpy of regasification.  ZET hopes to complete detailed engineering during 2027 to reach final investment decision in 2028 and start operations in 2030. Reuters reported last week that ExxonMobil Corp. had signed a preliminary deal to supply LNG to ZET. Developed as a joint between Vopak Terminal Durban and Transnet Pipelines, ZET project is expected to be South Africa’s first LNG terminal. The consortium will design, develop, construct, finance, operate, and maintain the terminal in the South Dunes Precinct at the Port of Richards Bay over a 25-year concession. EPC execution will be subject to ZET’s localization and economic development objectives. Successful contractors will be expected to support local supplier participation, skills development, and the use of local labor. Qualifying parties will be included in the project’s vendor database and may be shortlisted for subsequent phases as potential preferred contractors or subcontractors. The EOI submission window closes July 9, 2026. Interested contractors are invited to access the full EOI documentation here. South African utility Eskom and ZET earlier this month signed a head of agreement (HOA) establishing the framework for a long-term strategic partnership to support South Africa’s gas-to-power program, underpinning a planned 3-Gw power plant near the terminal in KwaZulu-Natal. Vopak Terminal Durban is owned by Royal Vopak and Reatile Group

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Petrobras greenlights renewables plant for RPBC refinery

REDUC’s fist soybean oil-based SAF sale Announcement of FID on the RPBC renewables plant followed Petrobras’ June 17 confirmation that its 239,000-b/d Duque de Caxias (REDUC) refinery in the Baixada Fluminense area of Rio de Janeiro had completed first production and sale of a first 3,800-cu m batch of SAF made from soybean oil certified under the CORSIA low Land Use Change (ILUC) risk standard, which verifies sustainability criteria and a lower risk of impact on new land areas. Produced via co-processing and featuring 1% renewable content, the SAF batch marked “commercialization of the world’s first SAF made from certified low-ILUC-risk soy [to demonstrate] Petrobras’s commitment to sustainability, the energy transition, and the development of products aligned with market and societal demands [for lower-carbon solutions],” said Angélica Laureano, Petrobras’ director of logistics, sales, and markets. In October 2025, the REDUC refinery secured Brazil’s first international approval to advance commercial-scale production of SAF via the hydroprocessed esters and fatty acids (HEFA) co-processing route complying with ISCC System GmbH’s International Sustainability Carbon Certification (ISCC) standards, validating that SAF produced at the site meets the highest international sustainability and lifecycle carbon emission standards. Developed under ICAO’s CORSIA, the ISCC CORSIA certification was a prerequisite for commercial-scale SAF production following rigorous assessment of the production’s lifecycle carbon emissions and traceability. Equipped to produce as much as 10,000 b/d of SAF using a blend of conventional petroleum and up to 1.2% renewable feedstock, REDUC’s integration of bio-based oils—such as vegetable oil—into existing refining infrastructure via the HEFA co-processing method allows the refinery to produce SAF alongside conventional jet fuel with minimal investment, Petrobras previously said.

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Equinor to expand Troll with TWIN subsea development

Equinor Energy AS and partners will invest about NOK 4 billion ($410 million) in the new Troll West increased gas recovery north (TWIN) subsea development in Troll field in the North Sea. The TWIN project consists of two wells in a template and a pipeline connected to existing subsea infrastructure. The umbilical and monoethylene glycol line will be extended to the new development. The project is expected to contribute about 11 billion std cu m of gas to Troll. It is the third step of Troll Phase 3, which produces gas from the Troll West reservoir. Recoverable reserves from Troll Phase 3, mainly gas, are estimated at 2.2 billion boe. In accordance with the Petroleum Act, the partnership will now send an announcement to the Ministry of Energy concerning the development. An environmental impact assessment has been carried out. Troll, which supplies as much as 10% of Europe’s daily demand for gas, contains about 40% of the total gas reserves on the Norwegian continental shelf and was developed in phases, with gas extraction from Troll Øst in Phase 1 and oil from Troll West in Phase 2. The oil in Troll West is produced from multiple subsea templates tied into Troll B and Troll C via pipelines. Production from the Troll C installation started in 1999. Troll C is also used for production from Fram, Fram H-Nord, and Byrding. Several amended development plans were approved in connection with installing multiple subsea templates on Troll West. Equinor Energy AS is operator of TWIN (30.55%) with partners Petoro AS (55.93%), A/S Norske Shell (8.19%), TotalEnergies EP Norge AS (3.69%), and ConocoPhillips Skandinavia AS (1.64%).

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ICYMI: Upstream M&A slows on pricing gaps while deal appetite holds

Despite a slowdown in headline deal values this spring, upstream mergers and acquisitions remain active beneath the surface. In this ICYMI episode of the Oil & Gas Journal ReEnterprised podcast, Mikaila Adams, managing editor, examines data from Enverus and Rystad Energy detailing international and North American upstream deal markets in 2025 and into 2026. The discussion explores how pricing uncertainty widened the gap between buyers and sellers, creating a temporary pause rather than a collapse in market activity. The episode also looks at where capital continues to flow and what those trends reveal about the industry’s direction. From North American consolidation led by the Devon Energy–Coterra Energy merger to continued interest in gas-weighted assets tied to Gulf Coast LNG exports, the analysis highlights the forces shaping today’s upstream M&A landscape. It also considers the likelihood of additional divestitures, private equity activity, and asset sales as companies refine their portfolios, pointing to continued dealmaking momentum even in a more volatile market. References Devon, Coterra joining forces to create 1.6 million boe/d shale titan https://www.ogj.com/general-interest/companies/news/55354563/devon-coterra-joining-forces-to-create-16-million-boe-d-shale-titan Ovintiv to divest Anadarko assets for $3 billion https://www.ogj.com/general-interest/companies/news/55358241/ovintiv-to-divest-anadarko-assets-for-3-billion Insights: Vaca Muerta’s scale, productivity—and why it has more to give https://www.ogj.com/home/podcast/55370296/insights-vaca-muertas-scale-productivityand-why-it-has-more-to-give Mitsubishi to enter US shale gas business through Haynesville asset acquisition https://www.ogj.com/general-interest/companies/news/55344199/mitsubishi-to-enter-us-shale-gas-business-through-haynesville-shale-acquisition Shell to expand Canadian operations with $16.4-billion acquisition of ARC Resources https://www.ogj.com/general-interest/companies/news/55373597/shell-to-expand-canadian-operations-with-164-billion-acquisition-of-arc-resources US upstream M&A hits $38 billion in 1Q26 before volatility temporarily pauses the market https://www.enverus.com/newsroom/u-s-upstream-ma-hits-38-billion-in-1q26-before-volatility-temporarily-pauses-the-market/ International upstream M&A stuck at historic low https://www.enverus.com/newsroom/international-upstream-ma-stuck-at-historic-low/ Upstream deal value falls 83% as oil price uncertainty widens the buyer-seller gap https://www.rystadenergy.com/insights/upstream-deal-value-falls Iran war impact on global oil markets https://www.ogj.com/IranWar

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JPMorgan conference notes: COO says EOG will ‘continue to be explorationist’

When Gaspar announced the $22 billion deal for Coterra in February, investors and analysts quickly began to question the future of the Marcellus assets that had been under Coterra’s umbrella. Activist investor Kimmeridge had been calling for Coterra’s board to divest that asset and focus on the Delaware, a push that has since landed on Gaspar’s desk and one the executive has repeatedly said will be addressed via a broader review of the enlarged Devon’s holdings. Several times during his chat with Jayaram, Gaspar touted Devon’s prowess in the Delaware—adding Coterra’s operations has grown its footprint there to nearly 750,000 acres—and delineated the review process as covering three main points. What’s the value of the various assets on their own? What’s the market for them and who might the strategic and financial buyers be? (Here, Gaspar specifically mentioned asset-backed securitization (ABS) money “that’s really entered the space.”) And thirdly, and “very fundamentally important,” how complementary are the individual business units to each other? Could discerning observers interpret the latter as suggesting that the Marcellus assets are indeed the odd duck in the group, as Kimmeridge has said? (See the map above.) And is the ABS reference more than a winking acknowledgment of a Reuters report a month ago that money manager Stone Ridge Asset Management had bid $8 billion for the Marcellus division using securitization as a big financial lever? Gaspar didn’t elaborate and Jayaram didn’t press the issue. But Gaspar emphasized that clarity around the review isn’t far away: “We’ve telegraphed this is more of a months exercise, not a years exercise. […] The view with which we are approaching this, we are aggressive. We will be mindful of how do we take this moment in time to create more value for the shareholders.”

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You can’t build sovereign infrastructure with Broadcom, says CISPE

CISPE has cited several reasons why VCF doesn’t fit the bill, in particular highlighting its lack of portability. This means that it doesn’t qualify as resilient under CISPE’s Sovereign and Resilient Cloud Framework. Earlier this month, the EU unveiled proposals for its Cloud and AI Development Act (CADA) to strengthen Europe’s digital economy. CADA will encourage investment in European research, lay down conditions for European data centers, and provide a single EU-wide assessment framework for cloud and AI sovereignty. CISPE said that Broadcom is a long way short of fulfilling the conditions proposed for CADA. Broadcom would fail to meet anything but a Level 1 certification under the CADA sovereignty framework, CISPE said, adding that Broadcom’s terms and conditions offer limited maintenance commitments, no source-code escrow, no substitution plan and no Data Act certification, all likely to fall foul of CADA’s recommendations.

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Break legacy lock-in: Strategic options for enterprises facing the vSphere 8 deadline

The acquisition of VMware by Broadcom has caused many enterprise IT leaders to reexamine their infrastructure strategies. For organizations running vSphere 8, the October 2027 end-of-support deadline is rapidly becoming a planning priority. What may appear to be a routine upgrade is driving bigger discussions about cost, flexibility, cloud strategy, and long-term infrastructure direction.  Many organizations have not only begun evaluating alternatives but also are leaving VMware.  “VMware has been a great, innovative company,” says Harsha Kotikela, senior director of product and solutions marketing at Nutanix. “But since the acquisition, their business model has fundamentally changed, and that is what is forcing IT leaders to adapt.” Sticker shock, vendor lock-in, and the need for flexibility One of the biggest catalysts has been licensing costs. Organizations that had grown accustomed to predictable contracts have encountered significant pricing increases, creating what Kotikela describes as “sticker shock.” At the same time, some enterprises are reevaluating their vendor relationships due to concerns about support availability and changes in partner engagement models. Beyond immediate operational concerns, IT leaders are also focused on future requirements. Hybrid cloud environments have become the norm, with applications and data distributed across data centers, public clouds, and edge locations. AI initiatives are adding another layer of complexity, requiring infrastructure that can support workloads wherever they need to run. “The future is about flexibility,” Kotikela says. “If enterprises want to implement AI at the edge, in the data center, or in the cloud, they need the capability to manage that environment without creating silos.” That flexibility is becoming a critical factor in infrastructure decisions. Organizations increasingly want platforms that support multiple deployment models, open APIs, and cloud-native technologies to minimize the risk of vendor lock-in. How a future-ready platform addresses IT and business requirements Nutanix positions its architecture around openness and choice, according to

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Qualcomm’s $3.9 billion purchase of Modular aims to change the data center dynamic

“Nvidia has something like 85% of the AI accelerator chip market,” he pointed out. “Sure, they have nowhere to go but down, but that’s still going to take them a while. More importantly, they have literally spent decades working with practitioners in AI and ML and compute-intensive fields, indoctrinating them into their CUDA software ecosystem. Rewriting that tool chain will take institutional change at most organizations, which means years, if not decades, to uncouple.” “Organizations that think they’ve achieved agnosticism because they’re using high-level abstractions like PyTorch, well,  they have come closest,” he observed. “But just cutting and pasting the same code into AMD Instinct can lead to memory and dependency errors. It’s like VM lift and shifts to the public cloud 10 years ago. Easier, but still possible to screw up.” Nonetheless, Annand said that the deal, if it goes through, is still good news for enterprises. 

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KKR Bets Big on AI Infrastructure With Helix Launch, Tapping Former AWS CEO Adam Selipsky to Build a New Hyperscale Model

To close industry watchers, it’s really no secret that the AI infrastructure race has entered another phase; one where capital formation itself may become as strategically important as GPUs, power procurement, or liquid cooling. And in launching Helix Digital Infrastructure, investment giant KKR is making a calculated wager that hyperscalers no longer simply need developers or financiers. They need a partner capable of orchestrating capital, energy, connectivity, and data center execution as a unified platform. The significance of that strategy is underscored by the executive chosen to lead it. Adam Selipsky, the former CEO of Amazon Web Services and one of the industry’s most experienced cloud operators, will serve as Co-Founder and CEO of Helix, bringing firsthand experience from the very class of customers the new venture intends to serve. A New Model for AI Infrastructure Helix launches with more than $10 billion in long-duration committed capital from founding investors including KKR, the Kuwait Investment Authority (KIA), NVIDIA, and Vistra. But the headline number tells only part of the story. The company has been structured around an increasingly important thesis: that AI infrastructure can no longer be assembled piecemeal. Rather than treating data centers, electrical supply, transmission capacity, and fiber connectivity as separate procurement exercises, Helix proposes a vertically coordinated approach in which a single organization manages and finances the entire infrastructure stack. According to KKR, the objective is to reduce execution risk and accelerate deployment for hyperscale customers facing unprecedented AI demand. As AI factories grow from hundreds of megawatts toward gigawatt-scale campuses, synchronization among land acquisition, utility planning, financing, construction, and technology deployment has emerged as one of the industry’s defining challenges. Helix is effectively positioning itself as an operating platform designed to simplify that complexity. Why Selipsky Matters The appointment of Adam Selipsky may be the announcement’s

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Beyond Hyperscale: Why Enterprise Data Centers Still Matter in the AI Era

“The enterprise data centers, even the new ones, tend to be far, far smaller than new hyperscale deployments,” Killian said. “Not uncommon to see enterprises deploy a quarter meg or one meg or two, maybe up to 10 megs. Whereas the hyperscale guys are deploying 40 up to 300 meg facilities.” But scale alone does not tell the story. For every one of the roughly 20 hyperscale users that dominate headlines, Killian noted, there may be 50 to 100 times as many large and mid-sized enterprise users. Those companies run critical business systems, purchase hardware, software, telecom and services, employ large data center teams, and often operate multiple facilities across domestic, edge, EMEA and Asia-Pacific footprints. In other words, enterprise demand may be smaller in unit size, but it remains massive in aggregate. And as AI shifts from training to inference, the enterprise data center could become newly strategic. Enterprise AI Is Not Hyperscale AI Killian’s central point is that enterprise infrastructure requirements differ materially from hyperscale requirements. Hyperscalers are primarily optimizing for massive scale and speed to market. Enterprises, by contrast, tend to prioritize reliability, flexibility, integration into broader IT systems, and audit and compliance. That difference has major implications for developers and colocation providers. “The real industry opportunity is to take some of the innovation and the economies of scale that we’re seeing from the hyperscale builds to deliver smaller chunks of data center capacity,” Killian said. That might mean adapting lessons from 40 MW or 100 MW campuses into enterprise-ready deployments of 2 MW, 4 MW or 8 MW. Killian pointed to providers such as DataBank and Flexential as examples of companies working to deliver hyperscale-derived efficiencies in smaller enterprise increments. He also noted that QTS and other large campus developers may reserve portions of multi-building campuses

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Revolutionizing Data Center Cooling: Innovations for AI and HPC Growth

This is a crucial point for AI infrastructure. In some markets, water can be as politically and operationally difficult as power. Evaporative cooling and cooling towers can consume large volumes of water, while discharge permits can slow projects or limit operations. Gradiant claims HyperSolved can expand access to alternative sources such as municipal reuse and impaired supplies, reduce reliance on freshwater, protect cooling performance through integrated treatment and AI-enabled operations, and minimize discharge through high-recovery concentration and reuse. The platform uses containerized systems for immediate or temporary capacity while also supporting permanent infrastructure and lifecycle operations from commissioning onward. That fits the AI data center buildout, where developers may need bridge capacity during construction, phased water infrastructure, or interim systems while permanent treatment plants are completed. This can address the speed of deployment issue that plagues many data center solutions. Water is becoming a siting and scaling variable that has to be addressed. A site may have land and power prospects, but if water sourcing, reuse, or discharge cannot be solved, the project will face higher costs, delays, and local opposition. Gradiant is positioning itself as the managed water layer for hyperscale AI, similar to how power providers, cooling vendors, and network suppliers each own critical infrastructure domains. The Pattern: Hybridization, Standardization, and Industrial Scale The announcements included here make it clear that cooling is seeing significant attention from technology vendors, and not just state-of-the-art new technologies such as direct-to-chip, but also traditional data center air cooling. T-Global and SiPearl are working on high-conductivity materials and two-phase modules for HPC chips. Castrol is providing fluids for direct-to-chip and immersion environments. These are technologies aimed at the heat source itself, where higher chip power and rack density are overwhelming conventional approaches. The reference design offerings from Johnson Controls acknowledges the importance

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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.

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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

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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

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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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