Token Engineering

When AI Overthinks: Lessons from the Illusion of Thinking Paper

Token Engineering

Show Notes

In this episode of Inference Time Tactics, Rob, Cooper, and CTO Byron unpack Apple’s “Illusion of Thinking” paper—why it split the AI community, what it reveals about reasoning model limits, and how hidden thinking traces shape performance. They share insights from building an open-source tool to reproduce the study, explain why models loop, overthink, or stall, and outline what it will take to build more reliable reasoning systems for real-world use. We talked about:

Why Apple’s Illusion of Thinking paper sparked heated debate in the AI community. How reasoning models work, including hidden “thinking” phases and token budget limits. Key findings on when reasoning improves results, when it degrades them, and where it stalls. Reasons models loop, overthink, or abandon tasks. Building an open-source tool to replicate the study and test local reasoning models. What real-time reasoning traces reveal about model behavior and limits. Challenges in scoring reasoning quality and treating “I don’t know” as a valid output. Why reasoning models must be matched carefully to specific tasks. The ongoing debate over scaling vs. new architectures for advancing reasoning. Developing a benchmarking platform to help enterprises choose models for IP-sensitive applications.

Resources Mentioned: Illusion of Thinking Paper https://machinelearning.apple.com/research/illusion-of-thinking Neurometric Illusion of Thinking Tool https://github.com/NeurometricAI/illusion-of-thinking

Connect with Neurometric:Website: https://www.neurometric.ai/ Substack: https://neurometric.substack.com/ X: https://x.com/neurometricai/ Bluesky: https://bsky.app/profile/neurometric.bsky.social

Hosts: Rob May https://x.com/robmay https://www.linkedin.com/in/robmay

Calvin Cooper https://x.com/cooper_nyc_ https://www.linkedin.com/in/coopernyc

Guest/s: Byron Galbraith https://x.com/bgalbraith https://www.linkedin.com/in/byrongalbraith

More from Token Engineering

Aug 5, 2026

In this episode of Token Engineering, Cooper sits down with Yash, Head of AI Research at Neurometric AI, to break down TMax from AI2 (Allen Institute for AI)—a fully open dataset and training recipe that pushes small open-weight models like Qwen to near-frontier performance on terminal agent tasks. The paper argues that diversity and difficulty matter more than where the data comes from—even when that data is entirely invented by Gemini rather than pulled from real-world code.

Jul 10, 2026

In this episode, Cooper sits down with Neurometric CEO, Rob May, to talk through a big-news month: the show's rebrand from Inference Time Tactics to Token Engineering, the launch of tokenminning.com as a response to the "tokenmaxxing" trend, Neurometric's new token engineering platform and fundraising announcement. But the bigger conversation is about why Rob thinks "token engineering" is about to become a discipline every AI company needs—the same way DevOps or UX became non-negotiable roles—and why he's betting the company on getting there first.

Jun 16, 2026

In this episode of Inference Time Tactics, Cooper sits down with Yash Sharma, Head of AI Research at Neurometric AI, to break down the Pioneer Agent paper from Fastino Labs—a system that uses Claude Sonnet as an ML engineer in a box to build and improve small language models end-to-end. From cold start data curation to production failure diagnosis, the paper argues the real bottleneck in SLM creation isn't training—it's everything around it.

May 29, 2026

In this episode of Inference Time Tactics, Cooper sits down with Fletcher Wimbush, CEO of Discovered AI, to get into what’s actually broken about hiring—and how 13 years of bootstrapped recruiting, 10,000 interviews, and four peer-reviewed journal articles became the foundation for a platform now outperforming its biggest competitors. With hundreds of applicants flooding every open role and general AI tools hitting the ceiling at 70-80% resume screening accuracy, Discovered is combining behavioral science with fine-tuned small language models to get hiring right the first time.

Mar 9, 2026

Every day billions of voice conversations happen across games, customer service calls, and financial transactions. Almost none of them are understood by machines. In this episode of Inference Time Tactics, Calvin Cooper and Yash Sharma sit down with Carter Huffman, CTO and co founder of Modulate, to explore the AI systems that can finally understand voice conversations in real time.

See all episodes →