Exponential Error Rates and Quadratic Costs Undermine AI Agents at Scale

Jul 19, 2025
Utkarsh Kanwat
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Summary

Exponentially compounding error rates and quadratically scaling costs render multi-step autonomous AI workflows mathematically and economically infeasible at scale, underscoring the pressing need to develop effective human-AI collaboration tools and feedback systems.

Key Points

  • Error rates compound exponentially in multi-step AI agent workflows, making autonomous workflows mathematically impossible at production scale
  • Context windows create quadratic token costs, making conversational agents economically unsustainable at scale
  • The real challenge is designing tools and feedback systems that agents can effectively use, not AI capabilities themselves

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