Optimizing AI apps in a million-token world

Fast Company

04-06-2025

The context size problem in large language models is nearly solved.
In recent months, models like GPT-4.1, LLaMA 4, and DeepSeek V3 have reached context windows ranging from hundreds of thousands to millions of tokens. We're entering a phase where entire documents, threads, and histories can fit into a single prompt. It marks real progress—but it also brings new questions about how we structure, pass, and prioritize information.
WHAT IS CONTEXT SIZE (AND WHY WAS IT A CHALLENGE)?
Context size defines how much text a model can process in one go, and is measured in tokens, which are small chunks of text, like words or parts of words. It shaped the way we worked with LLMs: splitting documents, engineering recursive prompts, summarizing inputs—anything to avoid truncation.
Now, models like LLaMA 4 Scout can handle up to 10 million tokens, and DeepSeek V3 and GPT-4.1 go beyond 100K and 1M respectively. With those capabilities, many of those older workarounds can be rethought or even removed.
FROM BOTTLENECK TO CAPABILITY
This progress unlocks new interaction patterns. We're seeing applications that can reason and navigate across entire contracts, full Slack threads, or complex research papers. These use cases were out of reach not long ago. However, just because models can read more does not mean they automatically make better use of that data.
The paper ' Why Does the Effective Context Length of LLMs Fall Short? ' examines this gap. It shows that LLMs often attend to only part of the input, especially the more recent or emphasized sections, even when the prompt is long. Another study, ' Explaining Context Length Scaling and Bounds for Language Models,' explores why increasing the window size does not always lead to better reasoning. Both pieces suggest that the problem has shifted from managing how much context a model can take to guiding how it uses that context effectively.
Think of it this way: Just because you can read every book ever written about World War I doesn't mean you truly understand it. You might scan thousands of pages, but still fail to retain the key facts, connect the events, or explain the causes and consequences with clarity.
What we pass to the model, how we organize it, and how we guide its attention are now central to performance. These are the new levers of optimization.
CONTEXT WINDOW ≠ TRAINING TOKENS
A model's ability to accept a large context does not guarantee that it has been trained to handle it well. Some models were exposed only to shorter sequences during training. That means even if they accept 1M tokens, they may not make meaningful use of all that input.
This gap affects reliability. A model might slow down, hallucinate, or misinterpret input if overwhelmed with too much or poorly organized data. Developers need to verify if the model was fine tuned for long contexts, or simply adapted to accept them.
WHAT CHANGES FOR ENGINEERS
With these new capabilities, developers can move past earlier limitations. Manual chunking, token trimming, and aggressive summarization become less critical. But this does not remove the need for data prioritization.
Prompt compression, token pruning, and retrieval pipelines remain relevant. Techniques like prompt caching help reuse portions of prompts to save costs. Mixture-of-experts (MoE) models, like those used in LLaMA 4 and DeepSeek V3, optimize compute by activating only relevant components.
Engineers also need to track what parts of a prompt the model actually uses. Output quality alone does not guarantee effective context usage. Monitoring token relevance, attention distribution, and consistency over long prompts are new challenges that go beyond latency and throughput.
IT IS ALSO A PRODUCT AND UX ISSUE
For end users, the shift to larger contexts introduces more freedom—and more ways to misuse the system. Many users drop long threads, reports, or chat logs into a prompt and expect perfect answers. They often do not realize that more data can sometimes cloud the model's reasoning.
Product design must help users focus. Interfaces should clarify what is helpful to include and what is not. This might mean offering previews of token usage, suggestions to refine inputs, or warnings when the prompt is too broad. Prompt design is no longer just a backend task, but rather part of the user journey.
THE ROAD AHEAD: STRUCTURE OVER SIZE
Larger context windows open important doors. We can now build systems that follow extended narratives, compare multiple documents, or process timelines that were previously out of reach.
But clarity still matters more than capacity. Models need structure to interpret, not just volume to consume. This changes how we design systems, how we shape user input, and how we evaluate performance.
The goal is not to give the model everything. It is to give it the right things, in the right order, with the right signals. That is the foundation of the next phase of progress in AI systems.