The concept isn't about fitting a massive codebase into one context window. Instead, it's a sophisticated architecture using a deep relational knowledge graph to inject only the most relevant, line-level context for a specific task at the exact moment it's needed.

Even models with million-token context windows suffer from "context rot" when overloaded with information. Performance degrades as the model struggles to find the signal in the noise. Effective context engineering requires precision, packing the window with only the exact data needed.

Google's Titans architecture for LLMs mimics human memory by applying Claude Shannon's information theory. It scans vast data streams and identifies "surprise"—statistically unexpected or rare information relative to its training data. This novel data is then prioritized for long-term memory, preventing clutter from irrelevant information.

Instead of just expanding context windows, the next architectural shift is toward models that learn to manage their own context. Inspired by Recursive Language Models (RLMs), these agents will actively retrieve, transform, and store information in a persistent state, enabling more effective long-horizon reasoning.

Simply having a large context window is insufficient. Models may fail to "see" or recall specific facts embedded deep within the context, a phenomenon exposed by "needle in the haystack" evaluations. Effective reasoning capability across the entire window is a separate, critical factor.

Overloading LLMs with excessive context degrades performance, a phenomenon known as 'context rot'. Claude Skills address this by loading context only when relevant to a specific task. This laser-focused approach improves accuracy and avoids the performance degradation seen in broader project-level contexts.

Even with large advertised context windows, LLMs show performance degradation and strange behaviors when overloaded. Described as "context anxiety," they may prematurely give up on complex tasks, claim imaginary time constraints, or oversimplify the problem, highlighting the gap between advertised and effective context sizes.

The 2017 introduction of "transformers" revolutionized AI. Instead of being trained on the specific meaning of each word, models began learning the contextual relationships between words. This allowed AI to predict the next word in a sequence without needing a formal dictionary, leading to more generalist capabilities.

A key advantage of Claude Cowork is its ability to run locally and access files directly on a user's computer. This provides the AI with vastly more context than is possible with cloud tools that have limited file uploads, enabling complex analysis of large, local datasets like hundreds of documents.