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Here’s why context engineering is such a big deal. We just spent 2 hours debating when an agent should rely on its internal knowledge vs. trying to find relevant context within data for just one type of question. We got through 2 test cases of hundreds. Even the people involved in the brainstorm couldn’t all agree on what they would expect humans to do in this situation. There truly was no right answer, and it’s always context specific customer by customer. Everything in context engineering is a tradeoff between a variety of factors: how fast do you want the agent to answer a question, how much back and forth interaction do you want to require for the user, how much work should it do before trying to answer a question, how does it know it has the exhaustive source material to answer the question, what’s the risk level of the wrong answer, and so on. Every decision you make on one of these dimensions has a consequence on the other end. There’s no free lunch. This is why building AI agents is so wild. It also highlights how much value there is above the LLM layer. Getting these decisions right directly relates to the quality of the value proposition.