Beyond Data: The Reasoning Revolution in AI

What if your AI could think rather than just remember?

Remember last week when we were debating whether AI is actually smart or just really good at faking in our previous newsletter? Well, things are getting interesting.

For years, the AI world has been obsessed with one thing: DATA. More data = better AI. Simple, right? Companies have been scraping the entire internet just to feed their hungry models, using tricks like CBOW and masking to help their AIs predict the next word.

But here's where it gets spicy. Website owners have turned to a range of measures to manage access to their content and one such tool is Nepenthes. This basically lures AI crawlers into endless loops of random nonsense pages. It's like sending the AI down a rabbit hole it can never escape. Brutal, but kind of genius.

DATA isn’t Everything, The AI Game Has Changed for Good

We have spotted something at Quash. Everyone's been playing the wrong game.

For years, the race in AI has been about collecting more data. But the real challenge isn’t about collecting data; it’s about structuring and refining it to drive meaningful decisions. In QA automation, AI isn’t just about retrieving past test cases or predicting likely bugs, it needs to understand context, make logical deductions, and adapt dynamically. As we move away from the era where more data meant more power, a new chapter in AI innovation is unfolding—one that’s all about reasoning.

While tech giants have been busy vacuuming up the internet, the real winners are the ones figuring out how to make AI think with what it already knows.

Here's a weird finding from our recent tests: Take what happened in our QA lab last week: When we pitted different AI models against each other for test case generation, GPT-4o churned out tons of solid general test cases—the kind that cover all the standard scenarios. But here's the twist: the smaller o3 mini completely ignored those general cases and instead zeroed in on the exact edge cases that would break our app in production. Two different thinking styles, two completely different results.

Think about what this means for a second. We've been measuring AI all wrong.

NSA: The nerdy breakthrough you should care about

DeepSeek AI has come up with something called Native Sparse Attention (NSA) that's honestly pretty cool. Instead of processing EVERY word in a conversation (which is slow and expensive), NSA uses a three-part system:

It groups words together to get the big picture
It zeroes in on only the important stuff
It pays special attention to recent context so it doesn't lose the thread

The result - AI that can follow complex conversations without breaking a sweat—or your GPU.

Breaking: AI's New Power Players Emerge

The reasoning revolution isn't just theoretical—it's manifesting in groundbreaking new models reshaping the competitive landscape:

Moonshot AI's Kimi k1.5 has stunned industry observers by outperforming both OpenAI's GPT-4o and Claude 3.5 Sonnet across multiple benchmarks.
xAI's Grok 3 harnesses 10x the computing power of its predecessor and introduces DeepSearch—an AI search engine that not only answers questions but explains its reasoning process.
Anthropic's Claude 3.7 Sonnet emerges as the first hybrid reasoning AI, with Claude Code allowing developers to delegate substantial engineering tasks directly from their terminal.
ByteDance's Doubao 1.5 Pro proves intelligent design can trump raw computing power, delivering enhanced performance through clever training that combines traditional methods with real-time learning.

We're witnessing not just incremental improvements but a fundamental shift in how AI systems process information, reason through problems, and generate solutions.

Every AI company the moment a new model drops

Tool we're obsessed with: AutoGen Notebook Library

Our team stumbled onto this goldmine last week. If you're doing anything with AI agents, check out the AutoGen Notebook Library on GitHub.

It's basically a collection of Jupyter notebooks that solve common AI headaches without burning through your API budget testing every possible solution. It comes packed with ready-to-use AI agents and step-by-step guides that saved us weeks of trial and error on our visual testing experiments.

With advancements spanning AI models, coding tools, hardware efficiency, and creative AI, the industry is evolving faster than ever. Do these developments hint at a future where AI models become even more adept at reasoning and deduction? We certainly hope so, and at Quash, we’re excited to see—and be part of—that journey.

Foosball Fever

Sometimes, a small change makes all the difference. Our latest addition to the office—a foosball table—was meant to be a fun break from work, but it’s quickly become much more than that. Whether it’s a quick game between meetings or an intense late-night match, it’s turning into a ritual that helps us reset, refocus, and return to work with fresh energy.

What started as casual games has now sparked a competitive streak, with Hemanth and Anindya currently holding an undefeated record. But that might not last for long—teams are forming, strategies are being discussed, and we’re gearing up for the ultimate foosball championship at Quash. The stakes? Bragging rights, of course.

Beyond the friendly competition, it’s been a reminder that taking a step back can sometimes lead to better outcomes. A break at the foosball table isn’t just about the game—it’s about catching up with teammates, clearing your mind, and coming back stronger.

On another note, we’re excited to share that our newsletters are now live on our website! You can check them out here. The response has been incredible, and we truly thank you all for the support.

The End of Big Data + How AI's Reasoning Revolution Changes Everything 🧠