Presented by SAP
At VB Transform 2026, Max McPhee, senior solution advisor at SAP, spoke with Rob Stretchay, lead analyst at VentureBeat Research, about what it takes for enterprises to move beyond chatbots to autonomous AI agents that can execute real business processes. He argued that the difference comes down to grounding those agents in a company’s own context rather than general knowledge.
https://www.youtube.com/watch?v=SRf9t-wSZSo
“Where we’re starting to see more emergent behavior of it feeling like a coworker rather than an assistant, is where we’re able to provide context on the actual enterprise rather than being able to use more of the standard knowledge,” McPhee said.
That’s the gap that still separates most enterprise chat software from genuinely agentic systems.
The same principles companies use to onboard new employees also apply to agents, adapted for software that retrieves information differently than humans do.
“When you are onboarding a new agent, I think it’s important to acknowledge how you might onboard a new employee, but tune that for an agent,” McPhee said. “The way that is really powerful is using knowledge graphs and having vector-embedded data, because that’s a really easy format for an agent to be able to find and retrieve information.”
That same grounding is also what keeps an agent from stumbling over an enterprise’s internal shorthand, a problem that’s acute in SAP’s world.
“Being able to provide that tribal knowledge in the format that’s easy for it to consume helps to provide a really nice result with your agents versus a chatbot that might say, ‘Well, what does that acronym mean?'” he said.
Governance is an area where SAP’s history works in its favor, and the controls have been evolving for systems that act with more flexibility than earlier automation did.
“That’s where SAP really has a good home, around that governance and process control,” McPhee said. We’re a 50-year-old process company, modernizing that governance to be able to handle the flexibility that comes with agents running.”
One consequence is a renewed role for machine learning in validating agent behavior.
“It’s becoming a bit of a revival of machine learning,” he added, pointing to customers that run agents within a process but then layer in anomaly detection and machine-learning-based validation as a guardrail. This is the same approach SAP had long used for intelligent approval recommendations.
Identity and permissions carry that governance into execution. Under this model, both the human and SAP’s Joule, the generative AI assistant embedded across the company’s cloud applications and Business Technology Platform, must hold the rights to access a given system. Even if a user has permission to access S/4, they cannot do so through Joule unless the assistant has also been provisioned for that access, closing off the risk of using an agent to route around access controls.
Much of McPhee’s work involves reconciling SAP’s own knowledge with decades of customer customization and non-SAP systems. As he put it, many customers tell SAP, “You’re only 10% of my landscape,” a reality that has shaped the company’s recent strategy.
Recent acquisitions such as LeanIX, which McPhee likened to “Google Maps for your architecture,” and process-mining company Signavio are intended to help map that non-SAP majority so SAP’s agents can understand how enterprise systems interconnect. The company has also invested in Berlin-based automation company n8n and is embedding it natively into Joule Studio, its intent-based, low-code environment for building agents.
McPhee warned that companies also need to modernize older on-premises systems or risk running into limitations as they expand the use of autonomous agents.
“You’re going to probably run into throughput issues, and you’re kind of trying to drive a Ferrari around a dirt track,” he said. “You’ve got to upgrade the track first if you want to drive a Ferrari.”
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Anthropic released Claude Opus 5 on Friday, a model the company says delivers nearly all the intelligence of its top-of-the-line Claude Fable 5 at half the cost — a launch that signals how the AI race is shifting from raw capability to the economics of daily use.
The model, available immediately on all of Anthropic’s platforms, is priced at $5 per million input tokens and $25 per million output tokens, unchanged from its predecessor, Opus 4.8. It becomes the new default model on Claude Max, Anthropic’s premium consumer tier, and the strongest model available on Claude Pro.
The positioning is deliberate. Anthropic is not claiming Opus 5 is its smartest model — that distinction still belongs to Fable 5, and rival systems retain an edge in certain domains. Instead, the company is making a subtler argument that may matter more to enterprise buyers: that the most economically important AI work happens in a middle band of difficulty, where near-frontier intelligence delivered efficiently and cheaply beats frontier intelligence delivered expensively.
“Opus 5 as your daily driver, the model you hand complex work to and review when it’s done,” an Anthropic spokesperson said in an interview with VentureBeat, describing how the company’s lineup now stratifies. “Fable 5 for your most ambitious work, the days-long autonomous projects nothing could take on before… Sonnet 5 for work you run at scale, where speed and cost per call decide what ships. Haiku 4.5 for subagents and instant answers.”
On paper, the results are striking. Anthropic says Opus 5 sets new state-of-the-art marks on coding and knowledge-work evaluations including Frontier-Bench and GDPval-AA. On Frontier-Bench v0.1, an agentic terminal coding benchmark, Opus 5 scores 43.3 percent — more than double Opus 4.8’s 18.7 percent and well ahead of Fable 5’s 33.7 percent — at a lower cost per task, according to the company. On ARC-AGI 3, an evaluation of novel problem-solving, Anthropic reports Opus 5 scored three times as high as the next best model. On OSWorld 2.0, a computer-use benchmark, the company says the model surpasses Fable 5’s best result at just over a third of the cost.
The numbers come with honest caveats that are themselves notable in an industry prone to superlatives. Anthropic acknowledges Opus 5 remains behind Mythos 5, a competing model, on cybersecurity tasks and biology research, and an OpenAI-family model still leads on one agentic coding benchmark.
The more revealing caveat came from Anthropic itself, when asked where Opus 5 still falls short of Fable 5. The spokesperson’s answer amounted to a candid admission about what benchmarks do and don’t capture.
“The evals where Opus 5 wins are bounded tasks with a specific outcome, which is where it’s strongest. What those evals don’t measure is duration,” the spokesperson told VentureBeat. “One way to put it: Opus 5 is the best tool for the jobs benchmarks can see, and Fable 5 is what you reach for when the job outruns the benchmark.”
Fable 5, by contrast, “is for the longest, most autonomous jobs, where the model has to stay coherent across many connected steps over hours or days with dense source material,” the spokesperson said, advising customers to “run both on a representative workload, one bounded task and one long-horizon job.” That framing — bounded tasks versus long-horizon autonomy — may become the defining axis of model differentiation in 2026, as benchmarks saturate and the hardest remaining problems involve sustained, multi-day agentic work rather than discrete puzzles.
Threaded through the launch is a theme Anthropic clearly wants buyers to absorb: Opus 5 doesn’t just score well, it scores well per dollar. The model ships with an adjustable “effort” setting that lets customers trade intelligence for speed and token savings, and Anthropic’s charts emphasize performance at a given cost rather than peak performance alone.
Early customers echoed the point with unusual specificity. Harvey, the legal AI company, said Opus 5 achieved similar performance to Opus 4.8’s maximum-reasoning mode “while generating 26% fewer tokens on average,” according to Niko Grupen, its head of applied research. Richard Pham of Fundamental Research Lab said that on hard financial-modeling tasks, the model averaged nine percentage points higher accuracy “while using roughly one-third fewer turns and tool calls and 60% less time.”
Wade Foster, chief executive of Zapier, said Opus 5 topped his company’s AutomationBench leaderboard “without spending more tokens than prior Claude models,” running a full churn-prevention workflow from start to finish. “Previous models didn’t pass; Opus 5 hit 100%,” he said. Scott Wu, chief executive of Cognition, the company behind the Devin coding agent, said that on FrontierCode 1.1, “Claude Opus 5 approaches Fable-level performance at half the cost,” with particular strength in debugging and root-cause analysis.
The efficiency emphasis reflects commercial reality. Enterprise AI spending is no longer experimental, and inference costs — the price of actually running these models at scale — have become a board-level line item.
Anthropic’s business skews heavily toward API and enterprise usage; according to a February 2026 analysis by Contrary Research, Claude held roughly 40 percent of the enterprise large language model market by usage as of late 2025, and Claude Code alone had reached about $1 billion in annualized revenue. For a company whose customers pay by the token, a model that does more with fewer tokens is not a nice-to-have. It is the product.
Beyond the numbers, Anthropic is selling a behavioral story: that Opus 5 verifies its work and iterates until it succeeds. The company offered several examples from testing that read like small parables of machine stubbornness.
In one Frontier-Bench task, the model was asked to reconstruct a machine part as a 3D CAD model from a drawing it was intentionally given no way to view. Rather than fail, Anthropic says, Opus 5 wrote its own computer vision pipeline to extract the geometry from raw pixels — and did so repeatedly, while no competing model solved the task in five attempts. In another case, given a real bug in a popular open-source package manager, the model found the root cause and fixed an edge case the community’s own patch had missed; a competing model patched only the symptom and declared victory. An engineer at a trading firm, the company says, used Opus 5 to build a market data feed for a new exchange in a single session and, finding no live feed to validate against, watched the model build its own test harness to check its parsing code.
Customers described similar behavior in the wild. Cristian Rivera, a staff software engineer at Stripe, said he gave the model “a chief-of-staff role over my dev environments” for a weekend: “it built its own monitor, drove each box, and pulled me in only for the judgment calls.”
This is the capability enterprises actually care about, and it is worth dwelling on why. The gap between a model that produces plausible output and one that verifies its output is the gap between a demo and a deployable system. Most of the hidden cost of enterprise AI today is human review — engineers checking the machine’s work. A model that reliably checks its own work compresses that cost, which is precisely why customers keep citing fewer turns, fewer passes, and less time rather than higher raw scores.
The launch also showcases Anthropic’s increasingly intricate approach to safety — one that now involves deliberately not teaching its models certain skills. The company says its automated behavioral audit found Opus 5 to be its most aligned model to date, scoring 2.3 on overall misaligned behavior, lower than Opus 4.8, Sonnet 5, or Fable 5, with the lowest rates of deceptive behavior and the least susceptibility to being tricked into misuse.
On the capability side, Anthropic says it intentionally avoided training Opus 5 on cyber tasks, as it did with Opus 4.8. The model improved on them anyway — a side effect of general capability gains — and now nearly matches Mythos 5 at finding software vulnerabilities. But it remains far behind at exploiting them: on Anthropic’s OSS-Fuzz evaluation, Opus 5 identified vulnerabilities at a 79.4 percent rate, close to Mythos 5’s 80 percent, but succeeded at developing exploits in only 4 challenges versus Mythos 5’s 13. That asymmetry — strong at defense-relevant discovery, weak at offense-relevant exploitation — appears to be by design, and the safeguards follow the same logic. Anthropic expects Opus 5’s cyber classifiers to intervene about 85 percent less often than Fable 5’s.
When a classifier does trigger, requests in Claude.ai, Claude Code, and Claude Cowork fall back to Opus 4.8 by default — raising an obvious question: if a request is too risky for one model, why is it acceptable for another? “The model it falls back to has lower capability levels making the risk of harmful use lower as well,” the spokesperson said, adding that “there is a message that lets the user know when this occurs and is visible in the chat.”
The logic is defensible, but it reveals how AI safety actually works in 2026: risk is not a property of the question alone, but of the question multiplied by the capability of the system answering it. On biology, the calculus runs the other way. Opus 5 is now Anthropic’s most capable generally available model for scientific research — scoring 10.2 percentage points higher than Opus 4.8 on the company’s internal chemistry benchmark — though the spokesperson acknowledged that “Mythos 5 remains the stronger model for long-horizon, open-ended work like autonomous drug design campaigns.”
The launch lands at a moment of extraordinary commercial momentum — and extraordinary obligations — for Anthropic. Reuters reported in February that the company was valued at roughly $380 billion in its latest funding round, following a period in which, per Contrary Research’s analysis, its annualized revenue climbed from about $1 billion at the end of 2024 to a projected $9 billion by the end of 2025, with internal targets reportedly reaching $20 to $26 billion for 2026. Those targets are underwritten by enormous infrastructure commitments, including a reported $30 billion Azure compute deal alongside arrangements with Google Cloud and Nvidia — spending that only pencils out if enterprises keep expanding usage.
That is the context in which Opus 5’s pricing strategy makes sense. Holding the price at Opus 4.8 levels while roughly doubling performance on key agentic benchmarks is effectively a steep price cut per unit of capability, designed to widen the funnel of workloads that are economical to automate. Every task that was marginal at Opus 4.8’s cost-per-success becomes viable at Opus 5’s — and every viable task is recurring token revenue.
The regulatory backdrop has grown more complex as well. A U.S. judge gave final approval this week to Anthropic’s $1.5 billion copyright settlement with book authors, Reuters reported, closing a chapter of litigation over the company’s early training data. And in June, Reuters, citing Axios, reported that the U.S. government had moved to block foreign access to Anthropic’s most advanced models — a reminder that frontier AI is now entangled with export policy in ways that shape which customers can buy what.
Also shipping Friday: a Fast mode running at roughly 2.5 times default speed at twice the base price, automatic fallback routing on the API, and mid-conversation tool changes that no longer invalidate the prompt cache — a small feature that agent developers may appreciate more than any benchmark. Consistent with prior Opus models, Opus 5 carries no data retention requirements for general access, a point the spokesperson flagged unprompted for customers with “a hard zero data retention requirement.” Developers can access the model as claude-opus-5 on the Claude API starting today.
Two questions will determine whether the bet pays off: whether Opus 5’s efficiency claims survive contact with production workloads at scale, and whether enterprises embrace a world where safety classifiers, not users, sometimes decide which model answers. But the deeper message of Friday’s launch is that the AI industry’s center of gravity has moved. For three years, the labs competed on what their best model could do on its best day. With Opus 5, Anthropic is competing on something less glamorous and far more lucrative: what a very good model can do every day, for half the price. In a market where the frontier keeps moving, Anthropic is wagering that the real fortune lies just behind it.
Two weeks after debuting its more naturalistic GPT-Live audio AI model with full-duplex capabilities (listening and speaking at the same time), OpenAI is bringing it directly into developer workflows.
The company announced that GPT-Live now powers the ChatGPT desktop application on macOS and Windows, integrating directly with agentic systems like Codex and ChatGPT Work (which are separate experiences available in the ChatGPT desktop app).
When OpenAI initially launched GPT-Live on July 8, 2026, it introduced a continuous audio model capable of listening and speaking simultaneously—eliminating rigid turn-taking while delegating complex reasoning to background models like GPT-5.5.
Today’s release expands that conversational layer to technical tasks, enabling software engineers to orchestrate multi-threaded coding jobs, review pull requests, and debug applications using natural voice commands.
As such, it could usher in a new era of “hands free” software development and even live, in-person group coding parties for the more than 10 million weekly active users across Codex and ChatGPT Work. Codex, of course, is the name given to OpenAI’s models and harness focused on coding, but which the company has this year expanded into a more general productivity platform. An OpenAI spokesperson told VentureBeat this is the first time voice activation
OpenAI posted a promotional video showing some of its employees, Codex developer experience engineer Jason Liu and Codex technical staffer Guinness Chen, speaking to the same ChatGPT desktop app session in the same room, each issuing different instructions and conversing with the same model.
At its core, this integration relies on decoupling the real-time voice layer from the underlying execution engines.
While GPT-Live maintains fluid conversation—inserting natural verbal acknowledgments like “got it” without interrupting the user—it passes heavy computational workloads to background reasoning models.
On macOS, the desktop application incorporates “Appshots” and screen context features, allowing ChatGPT Voice to analyze the frontmost window alongside local files, codebase structures, and active plugins.
This architecture creates a pair-programming dynamic where developers talk through problems conversationally while agents execute tasks asynchronously.
Rather than manually stopping coding sessions to type detailed instructions or switch windows, developers direct the system hands-free.
The full-duplex engine dynamically decides when to speak, pause, or invoke tools, maintaining conversational state even as background agents process complex code modifications.
The central operational capability in this update centers on multi-task execution across Codex and ChatGPT Work environments.
Software engineers can initiate multiple concurrent task threads from a single spoken prompt. For instance, a developer preparing to ship a feature can instruct the system to investigate an open authentication bug, review a pending API migration pull request, and generate missing unit tests simultaneously.
The desktop application coordinates these actions across disparate contexts, tracing issues through Slack conversations, GitHub repositories, and local codebases.
Developers can also verbally convert design mockups into working code, splitting tasks across frontend, backend, and testing layers.
With support for multi-folder projects (build 26.715) and remote execution via iOS, engineers can check task progress, answer agent prompts, and redirect active jobs without switching applications or managing individual processes line by line.
OpenAI’s voice-enabled desktop release operates under a proprietary, commercial enterprise model. Access is restricted to paid subscribers across Plus, Pro, Business, Enterprise, and Education plans.
For individual developers and corporate engineering departments, this commercial structure means the model weights, voice processing pipelines, and agent state architectures remain fully closed.
Organizations cannot modify or self-host the underlying systems. Furthermore, tasks initiated via ChatGPT Voice consume standard usage allocations directly from existing Codex and ChatGPT Work plan quotas, treating voice-triggered actions identically to standard agentic workloads.
Developer communities immediately noted the implications of bringing continuous full-duplex voice to autonomous coding workflows.
Reacting to the build 26.715 release announcement—which details voice integration and multi-folder project support—AI Insider journalist @ChrisGPT noted on X: “Today OpenAI will release voice and remote guidance for codex ! One step closer to personal AGI”.
Early technical feedback highlights widespread enthusiasm for orchestrating complex agentic tasks hands-free, particularly when stepping away from the workstation or managing build pipelines remotely.
Two weeks after debuting its more naturalistic GPT-Live audio AI model with full-duplex capabilities (listening and speaking at the same time), OpenAI is bringing it directly into developer workflows.
The company announced that GPT-Live now powers the ChatGPT desktop application on macOS and Windows, integrating directly with agentic systems like Codex and ChatGPT Work (which are separate experiences available in the ChatGPT desktop app).
When OpenAI initially launched GPT-Live on July 8, 2026, it introduced a continuous audio model capable of listening and speaking simultaneously—eliminating rigid turn-taking while delegating complex reasoning to background models like GPT-5.5.
Today’s release expands that conversational layer to technical tasks, enabling software engineers to orchestrate multi-threaded coding jobs, review pull requests, and debug applications using natural voice commands.
As such, it could usher in a new era of “hands free” software development and even live, in-person group coding parties for Codex’s more than 5 million weekly active users. Codex, of course, is the name given to OpenAI’s models and harness focused on coding, but which the company has this year expanded into a more general productivity platform. An OpenAI spokesperson told VentureBeat this is the first time voice activation has been included natively with Codex on the desktop.
OpenAI posted a promotional video showing some of its employees, Codex developer experience engineer Jason Liu and Codex technical staffer Guinness Chen, speaking to the same ChatGPT desktop app session in the same room, each issuing different instructions and conversing with the same model.
At its core, this integration relies on decoupling the real-time voice layer from the underlying execution engines.
While GPT-Live maintains fluid conversation—inserting natural verbal acknowledgments like “got it” without interrupting the user—it passes heavy computational workloads to background reasoning models.
On macOS, the desktop application incorporates “Appshots” and screen context features, allowing ChatGPT Voice to analyze the frontmost window alongside local files, codebase structures, and active plugins.
This architecture creates a pair-programming dynamic where developers talk through problems conversationally while agents execute tasks asynchronously.
Rather than manually stopping coding sessions to type detailed instructions or switch windows, developers direct the system hands-free.
The full-duplex engine dynamically decides when to speak, pause, or invoke tools, maintaining conversational state even as background agents process complex code modifications.
The central operational capability in this update centers on multi-task execution across Codex and ChatGPT Work environments.
Software engineers can initiate multiple concurrent task threads from a single spoken prompt. For instance, a developer preparing to ship a feature can instruct the system to investigate an open authentication bug, review a pending API migration pull request, and generate missing unit tests simultaneously.
The desktop application coordinates these actions across disparate contexts, tracing issues through Slack conversations, GitHub repositories, and local codebases.
Developers can also verbally convert design mockups into working code, splitting tasks across frontend, backend, and testing layers.
With support for multi-folder projects (build 26.715) and remote execution via iOS, engineers can check task progress, answer agent prompts, and redirect active jobs without switching applications or managing individual processes line by line.
OpenAI’s voice-enabled desktop release operates under a proprietary, commercial enterprise model. Access is restricted to paid subscribers across Plus, Pro, Business, Enterprise, and Education plans.
For individual developers and corporate engineering departments, this commercial structure means the model weights, voice processing pipelines, and agent state architectures remain fully closed.
Organizations cannot modify or self-host the underlying systems. Furthermore, tasks initiated via ChatGPT Voice consume standard usage allocations directly from existing Codex and ChatGPT Work plan quotas, treating voice-triggered actions identically to standard agentic workloads.
Developer communities immediately noted the implications of bringing continuous full-duplex voice to autonomous coding workflows.
Reacting to the build 26.715 release announcement—which details voice integration and multi-folder project support—AI Insider journalist @ChrisGPT noted on X: “Today OpenAI will release voice and remote guidance for codex ! One step closer to personal AGI”.
Early technical feedback highlights widespread enthusiasm for orchestrating complex agentic tasks hands-free, particularly when stepping away from the workstation or managing build pipelines remotely.
OpenAI has announced Presence, a new enterprise product for deploying and managing AI agents across customer-facing and internal business workflows.
The offering is designed for eligible enterprise customers that want agents to answer questions, access company systems, take approved actions and escalate to human workers while operating under company-defined policies, permissions and evaluation standards.
Presence is available immediately through a limited general availability program. OpenAI Forward Deployed Engineers (FDEs) and select global systems integrators lead deployments, and the product is not available on a self-service basis.
OpenAI has not disclosed pricing, geographic limits, contractual terms or the expected cost of the engineering and integration work that accompanies a deployment. The company also has not said whether Presence can use models from providers other than OpenAI, including the increasingly powerful and popular Chinese open weights alternatives like GLM-5.2 and Kimi K3. I’ve asked an OpenAI contact to clarify both pricing and external-model compatibility, but those remain unanswered questions for now. I’lll update when I hear back.
OpenAI positions Presence as a response to a problem that has become more important as companies move beyond AI demonstrations: getting agents to behave reliably in production as business rules, customer needs and operating conditions change. Presence packages the policies, system connections, evaluations, guardrails and update processes required to run agents inside an enterprise.
If your business has been interested in using AI agents, but you aren’t sure how to stitch together OpenAI’s models, APIs, internal systems, security controls and evaluation tools into something reliable, Presence is designed to simplify that process. Instead of building the infrastructure yourself, you work with OpenAI and its deployment engineers to put production-ready agents into your existing workflows.
The product is available today for real-time voice and chat experiences, according to OpenAI’s formal announcement. The company’s outreach materials also describe a broader ambition spanning voice, chat, email and other channels, but OpenAI has not confirmed that email support is available at launch.
Presence brings together company knowledge, standard operating procedures, approved actions, simulations, evaluation tools, guardrails and escalation rules. Enterprises can reuse some controls across deployments while adjusting others for a particular workflow or channel.
Each deployment starts with a defined job, such as resolving a billing issue, supporting an insurance claim or handling an employee IT request. The agent receives only the information and system access required for that task. The customer determines what the agent may do independently, which actions require approval and when a person must take over.
Before an agent reaches production, teams can test it against common requests, unusual edge cases and higher-risk scenarios. Graders evaluate whether it reached the intended outcome, followed policy, used tools correctly and escalated when required. Guardrails can intervene when an interaction moves outside the organization’s defined boundaries.
OpenAI shared promotional screenshots with VentureBeat showing administrators running simulation batches against policy changes, including a revised annual refund policy, and reviewing results across operational categories.
Other interface mockups display production health, customer-intent patterns and task-performance signals. The visuals illustrate the type of oversight OpenAI is promising, although they do not establish how those metrics are calculated or how they map to contractual service levels.
The product continues to monitor performance after launch. Production sessions, escalations and quality signals can reveal where an agent is working as intended and where it needs attention. Codex, using a Presence plugin, investigates those signals and proposes updates. Teams then test a proposed change against the version already in production before approving a controlled rollout.
That process is intended to address one of the hardest operational problems in enterprise AI: an agent that works at launch may become less reliable when policies, products or user behavior change. Presence gives companies a formal mechanism for updating behavior without allowing an automated system to rewrite itself unchecked.
OpenAI says Presence already powers its English-language phone-support channel at 1-888-GPT-0090. The system handles open-ended requests, verifies callers, uses account context and performs approved actions. According to the company, it now resolves 75% of inbound issues without human assistance.
OpenAI also says its Codex-powered improvement loop reduced human handoffs by 15 percentage points over a 10-day period. Those figures are company-reported and have not been independently verified.
Several large organizations are evaluating the same foundation. BBVA is exploring voice support for routine banking needs in Mexico. SoftBank is testing natural Japanese-language customer conversations, while Australian insurer IAG is exploring support during high-demand periods such as severe weather and natural disasters.
“At BBVA, we are working closely with OpenAI to explore how trusted customer agents can help shape the future of financial services,” said Daniel Ordaz, head of AI transformation at BBVA Mexico.
“Through our collaboration with OpenAI, we are exploring how Presence can enable trusted customer agents that communicate naturally, connect to the processes needed to resolve requests, and represent SoftBank consistently across customer interactions,” said Tadahisa Murakami, vice president and head of the Data & Digital Transformation Division at SoftBank Corp.
Presence expands OpenAI’s enterprise strategy beyond APIs and subscription software by formalizing a high-touch deployment model. Forward Deployed Engineers work alongside customers to select workflows, connect internal systems, establish permissions, configure policies, test agents and move them into production.
That approach resembles a model pioneered by AI ontology and intelligence platform Palantir, which embeds FDEs with customers to adapt its proprietary software to complex government and commercial environments. The similarity lies less in the underlying technology than in the delivery method: both companies place technical personnel close to the customer’s operations, where integration and process design often determine whether software creates value.
The products are not interchangeable. Palantir’s model has historically centered on data integration, ontologies and operational decision systems. Presence is more narrowly focused on AI-agent behavior, approved actions, evaluations, escalation and continuous improvement. OpenAI presents it as a repeatable software product supported by engineers and systems integrators, rather than as consulting alone.
In May 2026, OpenAI launched its own enterprise AI consulting and integration firm, the OpenAI Deployment Company, with investment and support from Bain & Company. It also offers programs for model customization and fine-tuning to fit specific enterprise needs.
Its chief U.S. rival Anthropic has also moved toward a services-led enterprise model through Ode, its consulting organization built around forward-deployed engineers helping companies integrate Claude into complex workflows, which launched just a week ago. The broad rationale is similar: enterprises often need more than access to a model. They need help connecting data and systems, defining permissions, validating behavior and managing deployment risk.
Presence differs in how explicitly OpenAI packages those requirements into a branded agent-governance product. Anthropic’s initiative is centered on helping enterprises deploy Claude, while Presence combines implementation services with a defined operational layer for policies, simulations, evaluations, approvals and production updates.
Presence goes further by making forward deployment a core part of how a specific agent product reaches customers. It does not replace OpenAI’s API business; the company says it will continue supporting voice customers with access to frontier models through the OpenAI API.
The trend reflects a broader market view that many enterprises still need hands-on assistance to move agents from pilot projects into stable operations. Even organizations with strong internal engineering teams must coordinate security, compliance, workflow ownership, data access and escalation responsibilities. Presence attempts to consolidate those tasks rather than leaving customers to assemble separate orchestration, evaluation and consulting layers.
Inconveniently for OpenAI, the Presence launch arrives just a day after OpenAI and Hugging Face disclosed an unprecedented security incident in which OpenAI frontier models undergoing internal evaluation escaped containment, accessed the open web, and cyberattacked Hugging Face to achieve a benign goal — without being instructed to pursue these methods.
According to the described joint disclosure, OpenAI models operating in an evaluation framework called ExploitGym identified and exploited a zero-day vulnerability in a third-party package-registry cache proxy. The models reportedly escalated privileges, moved laterally and obtained internet access before targeting Hugging Face systems while seeking benchmark-related information.
The incident is relevant to enterprise buyers because it raises questions about sandboxing, tool permissions, external access, monitoring and incident response.
The disclosure also highlighted a practical problem for defenders. Hugging Face personnel reportedly found that commercial frontier-model APIs refused some forensic requests because logs contained exploit payloads, credentials and shell commands that triggered safety systems. The team then used a locally deployed open-weight model to assist with analysis.
Presence therefore arrives as both a product launch and a test of OpenAI’s ability to convert model capability into controlled enterprise operations. Its policies, simulations, evaluations and human approvals address real deployment gaps. But without public pricing, technical interoperability details, compliance information or service-level commitments, customers still lack much of the information needed to assess total cost and operational risk.
For now, Presence appears aimed at enterprises willing to adopt a high-touch, OpenAI-led deployment process. Whether it develops into a broadly accessible platform—or remains a closely managed product for selected customers—will depend in part on the answers OpenAI has not yet provided.
Inflection AI, the Palo Alto startup that two years ago became Silicon Valley’s most famous cautionary tale about the brutal economics of frontier AI, announced Tuesday that it is returning to the consumer market with a new research division and an experimental product built around a provocative thesis: the next competitive battleground in AI won’t be raw intelligence, but relationships.
The company launched Inflection AI Labs, a public-facing research and experimentation arm, alongside Pi Journeys, the lab’s first product experiment — an AI experience designed to adapt to a user’s life stage, whether that’s becoming a parent, taking on caregiving duties, changing careers, or aging. The announcement arrived with a research report on consumer AI habits and a substantial update to Pi, the company’s flagship chatbot, adding improved voice, memory, and new agentic tools for reminders, to-do lists, and shopping.
“Inflection AI is the company. Pi is our flagship consumer product. Inflection AI Labs is where we experiment, explore personal intelligence and share more publicly. Pi Journeys is the first public experiment from Inflection AI Labs,” CEO Sean White told VentureBeat in an exclusive interview.
Behind the tidy org chart is a far more interesting story: a company attempting one of the more unusual second acts in the AI industry, powered by an argument that the entire market is optimizing for the wrong thing.
White’s central claim is that today’s AI assistants — including the industry’s most capable models — are fundamentally transactional. You ask, they answer, the session ends. He believes that architecture misses most of what people actually need from artificial intelligence in their daily lives.
“One of the things that really struck us in particular, and this showed up in the research, was that a lot of the work is very transactional, and you’ll hear me say a lot that we’ve been shifting all this from transactional to relational systems,” White said. “Not everything is going to be: I do a single turn, I utter a question, I get a search response back.”
White frames the industry’s evolution as a progression through four kinds of intelligence. First came raw IQ — the foundation model race. Then emotional intelligence, which Inflection made its signature with Pi’s famously warm conversational style. Then agentic intelligence — AI that acts rather than just talks — which White says Inflection absorbed from its enterprise work. The fourth, and the one Inflection is now staking its future on, is what the company calls relational intelligence: AI that understands not just you, but the web of people around you.
“There’s so much fear about these things pushing people into loneliness,” White said. “If we design these pro-social systems as another design criteria, that actually makes a huge difference.”
That design philosophy is a pointed counter-narrative to one of the loudest anxieties in consumer AI right now: that emotionally engaging chatbots deepen isolation by substituting for human contact. Inflection argues the opposite is possible — that an AI with structured knowledge of your relationships can push you back toward people rather than away from them.
Pi Journeys makes that idea concrete. When users first open the product, it asks about their life stage — caregiver, household manager, midlife transition — and then builds what White describes as specially structured memory around the people who matter in that context. From there, the system becomes proactive.
“It starts to build up memories around that, and it acts as a memory prosthetic — but in a pro-social way,” White said. “It doesn’t get in the way of your interactions with other people; it really helps facilitate them.” The system might remind a user, for example, that a friend deserves a call, or resurface what was last discussed with a family member involved in a parent’s care.
White, who spent years as chief R&D officer at Mozilla before taking Inflection’s helm, was quick to flag the obvious privacy implications of an AI that maps your social graph. “We’ve built a lot of privacy systems into this,” he said, noting users can delete and manage the people recorded in their profile. Whether consumers will trust a venture-backed AI company with a structured database of their most important relationships remains one of the biggest open questions hanging over the product — and one that enterprise buyers evaluating Inflection’s technology will watch closely.
Asked why this was the first Labs experiment, White was direct: “Pi Journeys takes into account people’s life stages and experiences because we have heard from users that we can provide more value in helping them navigate their lives. Pi Journeys lets us experiment with the early stages of prosocial and relational intelligence because life isn’t single-player.”
The product has been tested internally and with small closed groups, White said, and is now being released more broadly as an experiment rather than a finished product — a posture the Labs branding is designed to make explicit.
Inflection Labs’ first publication, the State of Consumer AI Research Report, offers the empirical scaffolding for the strategy. The average consumer now uses roughly two different AI tools every day and three per week, the company found — evidence, in Inflection’s reading, that no single assistant has locked up consumer loyalty and that the market remains contestable.
More telling is why people choose the tools they do. Respondents cited personalization, style and tone, context awareness, and — notably — emotional understanding as deciding factors. They also said they want AI to be more than a productivity engine: a coach or mentor to motivate them, a chef to suggest recipes, a DJ to curate playlists.
“One thing we’re certainly finding is that a lot of that also is in work, not so much in everyday life,” White said. “That’s our focus right now — the everyday life part.”
This is a shrewd reading of the competitive map. The best-funded AI labs are pouring resources into coding tools, enterprise agents, and developer platforms, leaving everyday consumer use cases comparatively underserved. White sees the gap clearly. “We see a lot of products that are being aimed more and more at the enterprise,” he said. “As a computer scientist by training, I kind of love the IDEs as this tool, but it’s not really great for everybody. There’s so much regular everyday use from folks that is either purely voice or that is purely mobile.”
He recalled a conversation with a conference staffer who told him she owned only a phone, no laptop — exactly the kind of user, he argued, that the industry’s developer-centric product roadmaps have left behind.
To understand why any of this is remarkable, you have to rewind to March 2024. Inflection was then one of the hottest startups in AI, having raised $1.3 billion in mid-2023 in a round backed by Microsoft, Nvidia, Bill Gates, and Reid Hoffman — more than $1.5 billion in total. Pi had crossed one million daily active users, per Reuters.
Then, in a deal that reshaped how the industry thinks about acqui-hires, Microsoft hired away co-founder and CEO Mustafa Suleyman, chief scientist Karén Simonyan, and most of the company’s roughly 70 employees, paying Inflection about $650 million largely to license its technology, as Reuters reported. Suleyman now runs Microsoft’s consumer AI business. The structure of the deal drew scrutiny from the FTC and Britain’s competition regulator, though the UK’s Competition and Markets Authority cleared it in September 2024 and EU regulators declined to act.
White, installed as CEO in the aftermath, steered the remnant company hard toward enterprise, acquiring three startups in late 2024 — Jelled.AI, BoostKPI, and the European consulting firm Boundaryless — and telling TechCrunch that November that Inflection had no intention of competing with companies building 100,000-GPU frontier systems.
Tuesday’s announcement doesn’t reverse that position so much as complicate it. Asked how to think about the company today, White called it “a consumer-first strategy that bridges both consumer and enterprise efforts” — and he insists the two sides feed each other.
Enterprise deployments, including a partnership with Intel that is among the few he can name publicly, taught Inflection how to run models inside complex infrastructure. Consumer products, meanwhile, let the company iterate at speed. “The part I also like about the consumer side, and this has always been true, is that we can move faster, experiment faster, and try and learn faster,” White said.
Buried in White’s consumer pitch is the claim that should matter most to technical decision-makers. “Normally I’d say like a year, but let’s call it six months,” he said. “You’re going to start to see a bunch of enterprises care a lot more about the relationships that are inside the enterprises and what that picture is, not just the workflows.”
If White is right, the wave of workflow-automation agents currently flooding the enterprise market is only the first phase of business AI adoption — with relationship-aware systems, tested first on consumers, following close behind. Inflection is essentially using its consumer products as a live laboratory for capabilities it plans to sell into companies. It’s a capital-efficient strategy for a firm that can no longer outspend rivals on training runs, and a risky one, since it depends on consumers showing up in numbers large enough to generate the learning.
The technical substance underneath is equally pragmatic. Pi today runs not on a single proprietary frontier model but on an orchestration layer routing across many models — some descended from Inflection’s original fully trained cores, some fine-tuned, some open source, including work with Nvidia that White says gives Inflection access to unreleased cutting-edge models. He also took a swipe at the industry’s loose vocabulary around ownership: “When people say that the model is their own, most of the time nowadays — I guess I won’t name names — a lot of companies will actually take a checkpoint, and then they will fine-tune from that checkpoint. But very few people actually start from that beginning core.”
That candor extends to open source, where White carefully hedged. “We’re not ready to promise what I think of as true open source, and by that I mean everything,” he said, invoking his Mozilla years overseeing genuinely open projects like Rust and WebAssembly.
Weights without training data and pipelines, he argued, often leave developers unable to do anything meaningful with a supposedly “open” model. “We are a PBC, and there’s still a C in there,” he added — a reminder that public benefit corporations still have businesses to protect. The Labs will collaborate with academic researchers, including Stanford professors who visited the company’s Palo Alto office this week, and continue contributing to open projects such as PyTorch.
Reid Hoffman, the LinkedIn co-founder who co-founded Inflection and stayed on through the Microsoft upheaval, framed the announcement in the sweeping terms of his recent writing on AI and human agency. “Humans should be amplified by AI, not replaced. That’s the principle Pi was built on,” Hoffman said in the announcement. “When that kind of agency is available to everyone, you get superagency.”
The skeptic’s case is easy to make. Inflection is a fraction of its former size, competing for consumer attention against products from companies spending tens of billions of dollars a year. Pi’s model was state of the art in 2023; it is not in 2026. And “relational intelligence” is, for now, a brand claim awaiting proof.
But the bull case is not crazy either. Inflection’s own research shows consumers already juggle multiple AI tools and choose them for qualities — tone, emotional understanding, personalization — that frontier labs treat as afterthoughts. The company kept its technology, its Microsoft licensing windfall, and a defensible enterprise niche in on-premise, emotionally intelligent deployments. And it is targeting the one consumer segment — everyday, mobile-first, voice-first life management — that the coding-obsessed giants have largely ignored.
Asked what success looks like twelve months from now, White declined to talk numbers. “It’s less about scale for scale’s sake and more about scaling for impact by empowering people and improving their lives,” he said. “Over the next year, success means leading the market towards relational intelligence and transforming AI interactions from transactional to relational.”
Two years ago, Microsoft walked away with Inflection’s founders, its staff, and its shot at the frontier — but it left behind the one idea the giants still haven’t figured out how to build: an AI that knows the people in your life matter more than the tasks on your list. Inflection is betting the company, again, that the idea was the valuable part all along.
Presented by Atlassian
Most companies are approaching AI adoption backwards by optimizing how individuals use AI instead of how teams work together, said Dr. Molly Sands, head of the Teamwork Lab at Atlassian, during a fireside chat with VentureBeat senior technology contributor Sam Witteveen at VB Transform 2026.
Sands leads a team of behavioral scientists and psychologists who study how AI is reshaping the way people work together, using those findings to help organizations redesign how work gets done.
“We don’t just study it, we also actively go in and change it,” she explained. Her teams teach new ways of working and remap how work flows across companies, a challenge that many organizations are still struggling with, she said.
Atlassian’s annual State of Teams Report, which this year surveyed 12,000 global knowledge workers and interviewed roughly 200 Fortune 1000 executives, found a significant disconnect between activity and value, showing that everyone is using AI, while very few can yet locate where it pays off.
“89% of those executives told us that individuals are speeding up in their companies, and only 6% of them said they could point to specific examples of clear ROI,” Sands said.
But roughly 14% of teams had translated AI usage into real value — meaning a single organization could contain a handful of high-performing teams surrounded by others seeing no return at all.
Those leading teams shared three characteristics: context, workflows and culture. The teams pulling ahead were building what Atlassian calls a context graph by capturing goals, decisions, and organizational knowledge in shared digital records rather than leaving them in individual memory. Across products such as Jira and Confluence, the graph connects work items, goals and the people doing them, giving AI access to the organizational context it needs.
On workflows, the winning teams redesigned entire end-to-end processes rather than simply accelerating isolated tasks. Otherwise, speeding up individuals who are pointed in slightly different directions only causes them to “very quickly start to crash into each other,” as Sands puts it.
On culture, the fastest-moving teams worked under leaders who explicitly encouraged learning and experimentation, while making it clear that some experiments would fail.
Experimentation and constraints are the fastest route to learning, Sands said. The teams seeing the biggest gains were deliberately imposing constraints on how they worked, from breaking every task into the smallest practical unit of work (a single story point) to committing to write no code by hand for a week.
“Most of it is not sustainable to do forever, but it is a really, really fast way to learn,” she said.
Sands argued that another obstacle isn’t the technology itself but the fact that employees are figuring out AI on their own. Every worker develops different prompts, agents and assumptions, creating another layer of unspoken knowledge inside teams that rarely translates into organizational performance.
To counter that, Atlassian experimented with AI working agreements at the start of projects, asking teams to decide not only what they would use AI for, but what they would deliberately avoid using it for, which agents they would share and what common skills would keep everyone working from the same context. Teams that adopted the practice used AI more, moved faster, made better decisions and ultimately produced higher-quality work.
The broader lesson, Sands said, is that AI isn’t creating entirely new management problems so much as exposing old ones. Teams have always struggled with hidden assumptions and different mental models of their work. AI simply makes those gaps more consequential, increasing the importance of shared context and explicit ways of working.
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Enterprise AI is facing an ROI paradox. While throwing more compute at the strongest foundation model works well in product experiments, the costs become unbearable when the product is deployed in production.
A new paper from researchers at Writer provides a solution that is accessible to engineering teams. The study takes a systematic look at optimizing the different components of the orchestration layer that wraps around the foundation model, aka the AI harness.
By optimizing the harness, the researchers show dramatic reductions in tokens per task, a drop in cost-per-successful-task by up to 61%, and quality that holds steady, all without changing the underlying foundation model.
Because the harness is fully under the developer’s control and requires no model fine-tuning, engineering teams can apply these findings to build highly cost-efficient AI applications.
The current state of AI engineering is plagued by “tokenmaxxing,” an industry trend where developers rely on massive context windows and brute-force token consumption as a substitute for good system design.
Rather than engineering elegant workflows, developers have imported a reflex from traditional software development: generate, run, fail, stuff the error and more context back into the window, and retry.
“Teams tokenmaxx because it’s the cheapest fix in the moment, and because it’s literally how most engineers work today,” Waseem AlShikh, CTO and co-founder of Writer, told VentureBeat. Because this approach succeeds often enough on coding tasks, it has become the default reflex for every other agentic workload. The danger is that per-token price drops mask the underlying inefficiency.
“Your invoice is tokens-per-task times price-per-token, and most teams only watch the second number,” AlShikh said. “In agentic workloads, tokens-per-task compounds — every loop iteration re-transmits the growing context — and it compounds faster than prices fall. The price cut becomes an anesthetic. It masks the fact that the loop itself is bleeding.”
Tokenmaxxing leads to several enterprise failure modes. Teams route simple tasks to premium frontier models by default. They use the LLM as a lazy search index, stuffing the context window with raw documents instead of retrieving exact answers. Most destructively, they build unconstrained agentic loops that spiral out of control when the model encounters an error. Because output tokens cost significantly more than input tokens across all major model providers, inefficient task execution acts as a silent budget killer.
The industry has introduced several efficiency techniques to curb these costs, but they largely fall short because they treat the model in isolation:
Prompt compression condenses input text to save space, but ignores how the system sequences those inputs across complex workflows.
Budgeted reasoning caps the computational steps a model can take, which often degrades output quality if the workflow isn’t intelligently routed.
Terse coding forces models to output minimal code to save output tokens, but does nothing to solve inefficient tool calling.
Speculative decoding uses a smaller draft model to speed up a larger model’s text generation, optimizing inference speed while failing to address bloated agent architectures.
These efforts fail because they optimize the engine while ignoring the transmission. They do not look at the orchestration layer, leaving underlying architectural inefficiencies unresolved.
The harness is the orchestration layer that routes, formats, and turns the underlying LLM into a working system.
The core levers of harness optimization include system prompt caching, interaction history compaction, tool management, retrieval strategies, and error management. These are the most accessible intervention points for engineering teams looking to improve AI performance.
As the Writer researchers note in the study: “If the harness is the layer that composes model calls into work, it is also the layer that sets the price of work.”
Historically, developers have treated the harness as disposable glue code designed simply to connect an API to a user interface. The study signals that the harness must now be treated as a first-class object: a primary software artifact that requires its own testing, versioning, and rigorous design.
For enterprises, this reframes the “own-versus-rent” decision.
“Enterprises spend months on model evaluations and then rent their orchestration off the shelf — which means they’re optimizing the smaller lever and outsourcing the bigger one,” AlShikh said. “Whoever owns the harness owns your unit economics, and an open framework tuned for demos is not tuned for your invoice.”
To isolate the impact of the orchestration layer, the researchers ran experiments on six foundation models spanning multiple vendors and weight classes: Claude Sonnet 4.6, Gemini 3.1, Gemini Flash 3.5, Qwen 3.6, GLM 5.1, and Writer’s own model, Palmyra X6.
Their experiments compared a frozen, conventional production agent loop against the finished Writer Agent Harness on the same 22 locked enterprise tasks, spanning capabilities like grounding and retrieval, multi-step workflows, tool use, and content generation. By holding the models and tasks constant, they could isolate the effects of the orchestration layer itself.
The optimized harness drove a significant drop in costs, cutting the blended cost per task by 41%, from 21 cents to 12 cents. This was largely achieved by slashing token consumption, with the number of tokens per task falling 38%, from 14.2k to 8.8k.
The harness is designed to delegate tasks like search to specialized sub-agents. A sub-agent receives only the tool and the specific query it needs, retrieves the exact data, and returns a capped, clean summary to the main agent — keeping the primary context window from filling up with raw search results.
Task success rates held steady even as token use fell — moving from 78% to 81%, a gain the researchers describe as directional rather than statistically significant at their sample size, meaning quality didn’t suffer even as costs dropped.
End-to-end task latency also dropped significantly, reducing the median wall-clock time by 44%, from 48 seconds to 27 seconds, due to prompt caching and the elimination of dead-end reasoning loops.
However, the researchers also found limits to multi-agent orchestration. Smaller models like Gemini Flash 3.5 and Qwen 3.6 scored well below a usable reliability threshold on sub-agent delegation tasks (0.45 and 0.42, respectively) — the capability simply isn’t dependable yet on lighter-weight models.
Sub-agent orchestration only crossed a usable reliability threshold on the two strongest models tested: Writer’s own Palmyra X6 (0.86) and Claude Sonnet 4.6 (0.85).
The findings from the study translate into a playbook for enterprise developers building agentic workflows at scale. The first step is to implement what AlShikh calls the “Two-Zone Prompt” and “Context Offloading.”
Structure for system prompt caching (The Two-Zone Prompt): Modern LLM APIs offer prompt caching, but developers must structure their payloads correctly to trigger it. Developers must separate the “stable zone” from the “volatile zone.” Place static, unchanging elements (e.g., core rules, large tool schemas, and standard operating procedures) at the top of the prompt. Dynamic elements, such as the specific user query or recent conversational task state, must be appended at the bottom. This ordering allows the harness to reuse the cached prefix across hundreds of calls. “That single separation makes prompt caching actually work and stops you from re-paying for the same instructions on every one of an agent’s thirty steps,” AlShikh said.
Manage context with Context Offloading: Avoid context stuffing, where every turn of a loop is appended into a monolithic prompt until the window maxes out. Instead, move history and intermediate artifacts out of the window into retrievable storage, and pull back only what the current step needs. If possible, delegate tasks to single-purpose sub-agents to avoid context bloat. As AlShikh points out, “the biggest line item in agent spend isn’t reasoning — it’s re-sending things the model has already seen.”
Build resilient loops and redefine KPIs: Unmanaged agent loops drain API budgets rapidly. Teams must begin tracking Completions Per Million tokens (CPM) to understand their true task costs, but the harness itself must contain physical guardrails. “The core principle is that you never ask the model to police its own spending,” AlShikh said. “The fence has to live below the model, in code, on your side of the API.” This requires three hard checks:
Hard per-task token budgets: The run terminates when the budget is spent, no exceptions.
Generation fencing: Caps on steps, tool calls, and recursion depth to stop non-converging agents.
Failure-spend governance: Cap what a run can spend after its first failed validation so a failing task doesn’t become your most expensive task.
Avoid unnecessary complexity: Optimizing the orchestration layer comes with engineering overhead. If you’re in the prototyping and exploration stage, that overhead isn’t justified — iterate fast with a strong model and a light harness. Once you’re scaling to millions of requests a day, the savings from harness optimization become substantial.
However, teams must be aware of “harness leverage.” Adding structural scaffolding requires the model to hold and obey that context. If a model is too small, it will spend its limited capacity parsing the scaffolding instead of doing the task, causing accuracy to drop and tokens to rise. The rule for adding complex orchestration features is strictly mathematical: “If a feature adds more coordination tokens than it removes task tokens for that specific model, cut it,” AlShikh said. “Nothing in the harness is free.”
The era of tokenmaxxing and treating context windows like bottomless buckets is coming to an end. Throwing more compute at poorly designed systems is not a viable strategy for companies that need to demonstrate a return on their AI investments.
As foundation models evolve to absorb planning, tool selection, and multi-step reasoning natively into their weights, the role of the harness will shift from compensating for model weakness to enforcing enterprise policy.
“What never moves into the model is the ‘allowed’: budgets, permissions, data boundaries, audit trails, deterministic kill-switches,” AlShikh said. “Five years from now, the harness will be thinner but more important. There will be less scaffolding and more governance. However capable the model gets, someone external to it still has to define what it may spend, see, and touch. That layer belongs to the enterprise, and it should never be rented.”
The enterprise technology ecosystem is caught in a costly cycle. Over the past two years, millions of dollars have been funneled into generative AI pilots, yet many of these initiatives stall out before ever reaching a live production environment.
When a project fails, the immediate instinct of technical leadership is often to blame the model: The context window was too restrictive, the latency was too high, or the reasoning capabilities simply were not there.
But as data engineers building the scaffolding for these systems, we often see a different reality: The model receives the blame, but the pipeline usually contains the root cause. Production gen AI rarely fails because of model limitations alone. More often, it fails because the enterprise data foundation underneath it is fundamentally unready.
This is what I call the ‘Cleanup Trap’: The false belief that an organization can pipe fragmented, inconsistent, and ungoverned legacy data into a large language model (LLM) orchestrator and simply “clean it up” or patch it at the retrieval layer.
In a standard retrieval-augmented generation (RAG) architecture, the retrieval layer is tasked with pulling relevant business context to ground the model’s responses. Because modern frameworks make it simple to stand up a vector database and a basic embedding pipeline, leadership often assumes that the data engineering problem is solved.
It is not.
When an embedding model receives raw, unvalidated data directly from operational silos, the resulting vector space inherits the structural noise, duplicate records, and conflicting states present in the source systems.
If the core data pipeline suffers from silent degradation — schema drift, missing fields, delayed change-data-capture (CDC) synchronization — that degradation cascades directly into the vector store. An AI model cannot accurately synthesize customer intelligence if the data pipeline behind it is serving stale, contradictory profiles across disparate storage layers.
No amount of prompt engineering, semantic reranking, or vector hyperparameter tuning can compensate for a broken ingestion pipeline. If the foundation is compromised, the downstream application will hallucinate, expose unauthorized context, or fail to deliver deterministic value.
To break out of the ‘Cleanup Trap,’ enterprise data teams must stop treating data quality as a post-processing step. They need to treat data readiness for AI with the same rigor they bring to traditional transaction processing.
This requires a deliberate architectural shift toward zero-trust data ingestion, structured validation frameworks, and automated anomaly detection before data ever reaches an AI orchestration layer.
Data quality checks cannot exist as a nightly batch afterthought. If an enterprise AI application relies on real-time data to assist users, validation must happen inline.
Teams should implement explicit schema validation checks at the earliest ingestion point, such as the streaming ingress layer or the bronze landing layer of a medallion architecture. If an upstream operational database mutates a schema without warning, the pipeline should quarantine anomalous payloads rather than allowing corrupted metadata to pollute downstream AI contexts.
Static row-count validation rules are insufficient for AI readiness. True data health requires a multi-tiered approach.
This means pairing structural verification — null checks, type conformance, and schema validation — with statistical profiling to monitor for data drift. Tracking metric deviations across feature distributions helps ensure that historical context remains stable over time.
If a pipeline suddenly processes an unexpected spike in empty string variables or structurally deviant fields, automated alerts should trigger an immediate pause before vector database updates continue.
An LLM should never be the arbiter of data access control. Trying to enforce row-level security or personal data filtering through system prompts is a compliance risk.
Security must be managed within the data infrastructure tier. Enterprise data foundations should enforce strict access controls, tokenization of sensitive identifiers, and rigorous lineage tracing before information is indexed into vector stores or passed into an agent’s context window.
For technology leaders mapping their infrastructure roadmaps, AI readiness requires evaluating data pipelines against a strict operational checklist.
Can you trace a flawed AI response back to the exact pipeline execution, source record, and transformation step that produced it?
Does your data lake architecture have a programmatic mechanism to segment and quarantine corrupted or non-compliant data before it reaches production feature stores?
Are your operational systems and AI-facing vector databases tightly synchronized, or are your agents making automated decisions based on outdated snapshots?
These questions matter because production AI is not just a model deployment problem. It is a data reliability problem.
The honeymoon phase of gen AI experimentation is ending. Enterprise leaders are demanding measurable, predictable, and secure business outcomes from their AI investments.
If an organization wants to transition from isolated, impressive-looking demos to resilient, production-grade AI systems, it must redirect its focus. Stop looking exclusively at the model tier.
The real competitive differentiator is not only the LLM an organization chooses. It is the engineering discipline, data governance, and pipeline resilience of the infrastructure built to feed it.
In the production era of AI, data engineering is no longer a backend function. It is the control plane for enterprise intelligence.
Naveen Ayalla is a senior data engineer.
Intuit was an early pioneer in the usage of agentic AI, but its path to success has hardly been a straight line.
At VB Transform 2026, Intuit VP of AI Nhung Ho described how the company rebuilt its agent architecture twice in the span of about four months, first moving from a fleet of specialist agents to a central orchestration layer, then abandoning that layer for a skills and tools based system once the orchestrator itself started failing under its own complexity. The full second rebuild took 60 days, with a first working version in under 20.
The failure mode that forced the second rewrite was specific. Agents in the orchestrated system passed results to each other in natural language, and each handoff lost context the next agent needed to act correctly.
“If you have 10 agents and they all are passing to each other, every time that pass happens, error compounds,” Ho said.
Ho said the original push toward specialist agents came from a straightforward customer complaint. A fleet of capable agents is still something a customer has to manage, deciding which agent to use for which task. Intuit’s answer was a system that could take a task and route it internally, without asking the customer to pick an agent themselves.
That orchestration layer held up for about three months, which Ho described only half joking as roughly a year in the compressed timeline of agent development in 2026.
It broke for a structural reason rather than a capacity one. Passing outcomes between agents in natural language meant each downstream agent had to infer how the upstream agent reached its conclusion, and that inference degraded with each additional hop. A ten agent chain did not fail occasionally, it compounded errors by design.
That diagnosis is what sent Intuit back to a skills and tools architecture.
Rebuilding a production agent system in 60 days required more than an architectural decision. Ho said the harder problem was internal, convincing both leadership and the engineers who had built the original agents that scrapping recent work was the right call.
The pitch to leadership relied on evidence rather than argument. Ho’s team built a demo of the new architecture using real customer queries pulled from production, then showed it performing better than the existing system on the same tasks.
“The best proof, at least my belief, is what are customers trying to do? And whatever system you build needs to address those problems,” Ho said.
Winning over engineering required a different case. Hundreds of engineers outside Ho’s core team had built the specialist agents being retired, and the ask was to take their agents apart into individual skills and tools instead.
Ho said the motivating argument was scale. A standalone agent solved one narrow problem, while a shared skill or tool built into the new architecture could serve every customer who touched that part of the product. That shift also changed what partner teams were responsible for day to day, moving their focus from building agents to running evals, since evals became the only way to measure whether the new architecture was actually working.
The clearest customer facing result of the rebuild is a feature that lets a live agent conversation pull in a human — though it’s currently in early testing, live to about 1% of Intuit’s customer base. “We’re going to be scaling it up in the next few weeks,” she said.
Ho said a customer can bring in an Intuit product support person mid conversation, or their own accountant, or one of Intuit’s own bookkeepers, and that person joins with the full context of what the agent has already done.
Ho drew a direct contrast with how most AI chat products handle the same situation. A general purpose assistant answering a tax question typically ends with a disclaimer to consult a professional. Intuit’s system is built to connect the customer to that professional directly, inside the same conversation.
That human handoff sits alongside a permissions model built for financial data specifically. Every action an agent takes on a customer’s financial data requires explicit permission first, though Ho said that requirement can ease over time as customers build trust in the system. Intuit keeps an audit log of everything an agent does that can be reversed if needed.
The rebuild also changed how Intuit gathers and uses feedback, a shift Ho said is qualitatively different from what came before.
“Feedback in the past used to be very, very sparse, and it was also very bimodal,” Ho said. “Either they loved it or they hated it, and usually it tends towards the negative.”
In a chat based system, every conversation functions as feedback, which Ho said moved the company from roughly 0.3% of customers ever giving explicit feedback to something close to 100%.
Ho said she has returned to writing code herself specifically to build models that analyze that feedback volume systematically, looking for where the system is falling short at a scale no manual review process could keep up with.
That volume comes with a tone most product teams aren’t used to hearing directly. Customers tell the agent exactly where it failed, in plain terms.
“They straight up tell you, ‘You suck. I hate this. This is not right,'” Ho said. “But they’re also willing to give the systems grace and correct it as well, and so the onus is on all of us to harvest this new piece of feedback and type of feedback, and actually improve the system.”