Beyond Answers, Traces, and Efficiency: Evidence for Adaptive Reasoning

The Abstraction and Reasoning Corpus (ARC-AGI) has become a key benchmark for fluid intelligence in AI. This survey presents the first cross-generation analysis of 82 approaches across three benchmark versions and the ARC Prize 2024-2025 competitions. Our central finding is that performance degradation across versions is consistent across all paradigms: program synthesis, neuro-symbolic, and neural approaches all exhibit 2-3x drops from ARC-AGI-1 to ARC-AGI-2, indicating fundamental limitations in compositional generalization. While systems now reach 93.0% on ARC-AGI-1 (Opus 4.6), performance falls to 68.8% on ARC-AGI-2 and 13% on ARC-AGI-3, as humans maintain near-perfect accuracy across all versions. Cost fell 390x in one year (o3's $4,500/task to GPT-5.2's$12/task), although this largely reflects reduced test-time parallelism. Trillion-scale models vary widely in score and cost, while Kaggle-constrained entries (660M-8B) achieve competitive results, aligning with Chollet's thesis that intelligence is skill-acquisition efficiency. Test-time adaptation and refinement loops emerge as critical success factors, while compositional reasoning and interactive learning remain unsolved. ARC Prize 2025 winners needed hundreds of thousands of synthetic examples to reach 24% on ARC-AGI-2, confirming that reasoning remains knowledge-bound. This first release of the ARC-AGI Living Survey captures the field as of February 2026, with updates at https://nimi-ai.com/arc-survey/

In this paper, we offer a guide for researchers on evaluating reasoning in language models, building the case that reasoning should be assessed through evidence of adaptive, multi-step search rather than final-answer accuracy alone. Under an evaluation-oriented definition, reasoning requires selecting intermediate steps and halting according to input-dependent conditions, which we formalize as a search-like procedure. We show that single forward passes in scalable architectures are structurally limited in their ability to realize such variable-depth computation, motivating intermediate decoding and externalized reasoning traces as appropriate evaluation interfaces. Central to our argument is that final-answer accuracy alone is an insufficient measure of reasoning, because it provides little ability to diagnose or debug the underlying processes that produce individual solutions in frontier models. We therefore argue for a shift toward process-based evaluation, in which reasoning is assessed through the faithfulness and validity of intermediate reasoning traces as first-class evaluation targets.

Recent advances in Large Language Models (LLMs) have shown that increased inference-time reasoning can improve performance on complex tasks. However, many existing approaches rely on fixed or preallocated reasoning controls, such as fixed token budgets, pre-execution difficulty estimates, or activation-space interventions, and are often evaluated on standalone reasoning benchmarks rather than full agentic workflows. These assumptions may not hold in agentic AI systems, where reasoning requirements evolve dynamically through planning, tool use, memory retrieval, and agent-to-agent interactions. Consequently, reasoning can become either excessive or insufficient, resulting in unnecessary computation, increased latency, planning drift, excessive tool use, or incomplete solutions. We argue that a major challenge for next-generation agentic AI is not merely how much reasoning a language model should perform, but how it should allocate reasoning according to evolving task demands. We characterize over-reasoning and under-reasoning as recurring failure modes of misallocated reasoning and evaluate them on MATH-500 and the GAIA public validation benchmark. Using tool-decision latency, token consumption, token-limit exhaustion, and answer correctness, our results suggest that cases classified as over-reasoning are associated with higher computational cost without proportional accuracy gains, whereas cases classified as under-reasoning are consistently associated with incorrect or incomplete solutions. These findings motivate future research on adaptive reasoning mechanisms for agentic AI.