The Inference-Time Revolution: Beyond Scaling Laws to the Era of System 2 Reasoning
The Post-Chinchilla Era: The Fundamental Shift to Test-Time Compute For the first half of the 2020s, the trajectory of artificial intelligence was governed by the Chinchilla scaling laws, a set of empirical observations suggesting that intelligence was a direct function of three variables: parameter count, dataset size, and training compute. This paradigm fueled the "bigger is better" arms race, leading to the creation of monolithic models that required massive, energy-intensive training runs spanning months. However, as we move through 2026, the industry has hit a point of diminishing returns in the pre-training phase. Data exhaustion—the depletion of high-quality human-written text—and the escalating costs of compute have forced a pivot. We are no longer seeing the same exponential gains from simply adding more layers to a transformer architecture. Instead, the frontier of intelligence has shifted from the pre-training phase to the inference phase. This shift is character...