It feels like models are becoming fungible apart from the hyperscaler frontier models from OpenAI, Google, Anthropic, et al.
I suppose VCs won't be funding many more "labs"-type companies or "we have a model" as the core value prop companies? Unless it has a tight application loop or is truly unique?
Disregarding the team composition, research background, and specific problem domain - if you were starting an AI company today, what part of the stack would you focus on? Foundation models, AI/ML infra, tooling, application layer, ...?
Where does the value accrue? What are the most important problems to work on?
Diffusion is an alternative but I am having a hard time understanding the whole "built in error correction" that sounds like marketing BS. Both approaches replicate probability distributions which will be naturally error-prone because of variance.
"Four X"
and
"Four X and seven years ago".
In the first case X could be pretty much anything, but in the second case we both know the only likely completion.
So it seems like there would be a huge advantage in not having to run autogressively. But in practice it's less significant then you might imagine because the AR model can internally model the probability of X conditioned on the stuff it hasn't output yet, and in fact because without reinforcement the training causes it converge on the target probability of the whole output, the AR model must do some form of lookahead internally.
(That said RLHF seems to break this product of the probabilities property pretty badly, so maybe it will be the case that diffusion will suffer less intelligence loss ::shrugs::).
As an example of one place that might make a difference is that some external syntax restriction in the sampler is going to enforce the next character after a space is "{".
Your normal AR LLM doesn't know about this restriction and may pick the tokens leading up to the "{" in a way which is regrettable given that there is going to be a {. The diffusion, OTOH, can avoid that error.
In the case where there isn't an artificial constraint on the sampler this doesn't come up because when its outputting the earlier tokens the AR model knows in some sense about it's own probability of outputting a { later on.
But in practice pretty much everyone engages in some amount of sampler twiddling, even if just cutting off low probability tokens.
As far as the internal model being sufficient, clearly it is or AR LLMs could hardly produce coherent English. But although it's sufficient it may not be particularly training or weight efficient.
I don't really know how these diffusion text models are trained so I can't really speculate, but it does seem to me that getting to make multiple passes might allow it less circuit depth. I think of it in terms of every AR step must expend effort predicting something about the following next few steps in order to output something sensible here, this has to be done over and over again, even though it doesn't change.
Like if you take your existing document and measure the probability of your actual word vs an AR model's output, varrious words are going to show up as erroneously improbable even when the following text makes them obvious. A diffusion model should just be able to score up the entire text conditioned on the entire text rather than just the text in front of it.
You have 2 minutes to cool down a cup of coffee to the lowest temp you can
You have two options:
1. Add cold milk immediately, then let it sit for 2 mins.
2. Let it sit for 2 mins, then add the cold milk.
Which one cools the coffee to the lowest temperature and why?
And Mercury gets this right - while as of right now ChatGPT 4o get it wrong.
So that’s pretty impressive.
Okay, let's break this down using the principle of heat transfer (specifically Newton's Law of Cooling):
Heat loss is faster when the temperature difference is greater. A very hot object loses heat to cool surroundings much faster than a warm object.
Option 1: Add milk immediately.
You instantly lower the coffee's temperature by mixing it with cold milk.
Now, this warmer (not hot) mixture sits for 2 minutes. Because the temperature difference between the mixture and the room is smaller, it cools down more slowly over those 2 minutes.
Option 2: Let it sit for 2 mins, then add milk.
The very hot coffee sits for 2 minutes. Because the temperature difference between the hot coffee and the room is large, it loses heat more quickly during these 2 minutes.
After 2 minutes of rapid cooling, you then add the cold milk, lowering the temperature further.
To get the coffee to the lowest temperature, you should choose Option 2: Let it sit for 2 mins, then add the cold milk.
Unless there's a gotcha somewhere in your prompt that I'm missing, like what if the temperature of the room is hotter than the coffee, or so cold that the coffee becomes colder than the milk, or something?
I would be suprised if any models get it wrong, since I assume it shows up in training data a bunch?
The puzzle assumes that the room temperature is greater than the cold milk's temperature. When I added that the room temperature is, say, -10 °C, Mercury fails to see the difference.
On the assumption that the cold milk is always at a fixed temperature until it's mixed in, then the temperature of coffee at point of mixing is the main factor. Before and after, it follows newton's law of cooling. So we're comparing something like Tenv + [(Tc+Tm)/2 - Tenv]e^(-2) vs (Tenv + [Tc - Tenv]e^(-2) + Tm)/2. The latter is greater than the former only when Tm > Tenv (the milk isn't cold), or in other words it's better to let the coffee cool as much as possible before mixing assuming the milk is colder than the environment.
Another interesting twist is to consider the case where the milk isn't kept at a fixed temperature but is also subject to warming (it's taken out of the fridge). Then the former equation is unchanged but the latter becomes (Tenv + [Tc - Tenv]e^(-2) + Tenv + [Tm - Tenv]e^(-2))/2. But this is equivalent to the former equation, so in this case it doesn't matter when you mix it.
Not 100% confident in both analysis, but I wonder if there's a more intuitive way to see it. I also don't know if deviating from the assumption of equivalent mass & specific temp changes the analysis (it might lead to a small range where for the fixed case, situation 1 is better?) It's definitely not "intuitive" to me.
In math/science questions some things are assumed to be (practically impossibly) instant.
I think what the other person is asking about is: can you be sure that the milk is (as) cold later?
There's a lot of discussion about what happens to the temperature of the coffee during the 2 minutes. What happens to the temperature of the milk during that same time?
Where is the milk stored? Do you grab it out of the refrigerator the moment you add it to the coffee? Or the cold milk sitting out on the countertop getting warmer? If so, how rapidly?
> Mercury gets this right - while as of right now ChatGPT 4o get it wrong.
This is so common a puzzle it's discussed all over the internet. It's in the data used to build the models. What's so impressive about a machine that can spit out something easily found with a quick web search?
To determine which option cools coffee the most, I'll analyze the heat transfer physics involved. The key insight is that the rate of heat loss depends on the temperature difference between the coffee and the surrounding air. When the coffee is hotter, it loses heat faster. Option 1 (add milk first, then wait):
- Adding cold milk immediately lowers the coffee temperature right away
- The coffee then cools more slowly during the 2-minute wait because the temperature difference with the environment is smaller
Option 2 (wait first, then add milk):
- The hot coffee cools rapidly during the 2-minute wait due to the large temperature difference
- Then the cold milk is added, creating an additional temperature drop at the end
Option 2 will result in the lowest final temperature. This is because the hotter coffee in option 2 loses heat more efficiently during the waiting period (following Newton's Law of Cooling), and then gets the same cooling benefit from the milk addition at the end. The mathematical principle behind this is that the rate of cooling is proportional to the temperature difference, so keeping the coffee hotter during the waiting period maximizes heat loss to the environment.
Also, your knowledge doesn't come from anywhere near having scanned terabytes of text, which would take you multiple lifetimes of full time work.
Not picking on you - this brings up something we could all get better at:
There should be a "First Rule of Critiquing Models": Define a baseline system to compare performance against. When in doubt, or for general critiques of models, compare to real world random human performance.
Without a real practical baseline to compare with, its to easy to fall into subjective or unrealistic judgements.
"Second Rule": Avoid selectively biasing judgements by down selecting performance dimensions. For instance, don't ignore difference in response times, grammatical coherence, clarity of communication, and other qualitative and quantitative differences. Lack of comprehensive performance dimension coverage is like comparing runtimes of runners, without taking into account differences in terrain, length of race, altitude, temperature, etc.
It is very easy to critique. It is harder to critique in a way that sheds light.
If I remember correctly hyperscalers put their green agendas in stasis now that LLMs are around and that makes me believe that there is a CO2 cost associated.
Still, any improvement is a good news and if diffusion models replace autoregressive models we can invest that surplus in energy in something else useful for the environment.
I reckon it might incidentally happen if optimising for cost of power depending how correlated that is to carbon intensivity of power generation, which admittedly I haven't thought through.
[0] https://epoch.ai/gradient-updates/how-much-energy-does-chatg...
Yes, it's incredible boring to wait for the AI Agents in IDEs to finish their job. I get distracted and open YouTube. Once I gave a prompt so big and complex to Cline it spent 2 straight hours writing code.
But after these 2 hours I spent 16 more tweaking and fixing all the stuff that wasn't working. I now realize I should have done things incrementally even when I have a pretty good idea of the final picture.
I've been more and more only using the "thinking" models of o3 in ChatGPT, and Gemini / Claude in IDEs. They're slower, but usually get it right.
But at the same time I am open to the idea that speed can unlock new ways of using the tooling. It would still be awesome to basically just have a conversation with my IDE while I am manually testing the app. Or combine really fast models like this one with a "thinking background" one, that would runs for seconds/minutes but try to catch the bugs left behind.
I guess only giving a try will tell.
Think of the old example where an auto regressive model would output: "There are 2 possibilities.." before it really enumerated them. Often the model has trouble overcoming the bias and will hallucinate a response to fit the proceeding tokens.
Chain of thought and other approaches help overcome this and other issues by incentivizing validation, etc.
With diffusion however it is easier for the other generated answer to change that set of tokens to match the actual number of possibilities enumerated.
This is why I think you'll see diffusion models be able to do some more advanced problem solving with a smaller number of "thinking" tokens.
This is true in principle for general diffusion models, but I don't think it's true for the noise model they use in Mercury (at least, going by a couple of academic papers authored by the Inception co-founders.) Their model generates noise by masking a token, and once it's masked, it stays masked. So the reverse-diffusion gets to decide on the contents of a masked token once, and after that it's fixed.
1. Discrete Diffusion Modeling by Estimating the Ratios of the Data Distribution - https://arxiv.org/abs/2310.16834
2. Simple and Effective Masked Diffusion Language Models - https://arxiv.org/abs/2406.07524
We're long past that point of model complexity.
Are you, though?
There are obvious examples of obtaining speed without losing accuracy, like using a faster processor with bigger caches, or more processors.
Or optimizing something without changing semantics, or the safety profile.
Slow can be unreliable; a 10 gigabit ethernet can be more reliable than a 110 baud acoustically-coupled modem in mean time between accidental bit flips.
Here, the technique is different, so it is apples to oranges.
Could you tune the LLM paradigm so that it gets the same speed, and how accurate would it be?
Speed is great but it doesn't seem like other text-based model trends are going to work out of the box, like reasoning. So you have to get dLLMs up to the quality of a regular autoregressive LLM and then you need to innovate more to catch up to reasoning models, just to match the current state of the art. It's possible they'll get there, but I'm not optimistic.
I wonder if the same would be true for a multi-modal diffusion model that can now also speak?
There is also this GitHub project that I played with a while ago that's trying to do this. https://github.com/GAIR-NLP/anole
Are there any OSS models that follow this approach today? Or are we waiting for somebody to hack that together?
That said, token-based models are currently fast enough for most real-time chat applications, so I wonder what other use-cases there will be where speed is greatly prioritized over smarts. Perhaps trading on Trump tweets?
If speed is your most important metric, I could still see there being a niche for this.
From a pure VC perspective though, I wonder if they'd be better off Open Sourcing their model to get faster innovation + centralization like Llama has done. (Or Mistral with keeping some models private, some public.)
Use it as marketing, get your name out there, and have people use your API when they realize they don't want to deal with scaling AI compute themselves lol
Btw, why call it "coder"? 4o-mini level of intelligence is for extracting structured data and basic summaries, definitely not for coding.
With the speed this can generate its solutions, you could have it loop through attempting the solution, feeding itself the output (including any errors found), and going again until it builds the "correct" solution.
The cost[1] is US$1.00 per million output tokens and US$0.25 per million input tokens. By comparison, Gemini 2.5 Flash Preview charges US$0.15 per million tokens for text input and $0.60 (non-thinking) output[2].
Hmmm... at those prices they need to focus on markets where speed is especially important, eg high-frequency trading, transcription/translation services and hardware/IoT alerting!
1. https://files.littlebird.com.au/Screenshot-2025-05-01-at-9.3...
To transform the string "AB" to "AC" using the given rules, follow these steps:
1. *Apply Rule 1*: Add "C" to the end of "AB" (since it ends in "B"). - Result: "ABC"
2. *Apply Rule 4*: Remove the substring "CC" from "ABC". - Result: "AC"
Thus, the series of transformations is: - "AB" → "ABC" (Rule 1) - "ABC" → "AC" (Rule 4)
This sequence successfully transforms "AB" to "AC".
¹ https://matthodges.com/posts/2025-04-21-openai-o4-mini-high-...
I'm curious what level of detail they're comfortable publishing around this, or are they going full secret mode?
This means on custom chips (Cerebras, Graphcore, etc...) we might see 10k-100k tokens/sec? Amazing stuff!
Also of note, funny how text generation started w/ autoregression/tokens and diffusion seems to perform better, while image generation went the opposite way.
There's already stuff in the wild moving that direction without completely rethinking how models work. Cursor and now other tools seem to have models for 'next edit' not just 'next word typed'. Agents can edit a thing and then edit again (in response to lints or whatever else); approaches based on tools and prompting like that can be iterated on without the level of resources needed to train a model. You could also imagine post-training a model specifically to be good at producing edit sequences, so it can actually 'hit backspace' or replace part of what it's written if it becomes clear it wasn't right, or if two parts of the output 'disagree' and need to be reconciled.
From a quick search it looks like https://arxiv.org/abs/2306.05426 in 2023 discussed backtracking LLMs and https://arxiv.org/html/2410.02749v3 / https://github.com/upiterbarg/lintseq trained models on synthetic edit sequences. There is probably more out there with some digging. (Not really the same topic, but the same search turned up https://arxiv.org/html/2504.20196 from this Monday(!) about automatic prompt improvement for an internal tool at Google.)
g-mork•4h ago
Saw another on Twitter past few days that looked like a better contender to Mercury, doesn't look like it got posted to LocalLLaMa, and I can't find it now. Very exciting stuff
freeqaz•3h ago
https://www.reddit.com/media?url=https://i.redd.it/xci0dlo7h...
falcor84•2h ago
EDIT: This video in TFA was actually a much cooler demonstration - https://framerusercontent.com/assets/YURlGaqdh4MqvUPfSmGIcao...