Context Engineering is All You Need

One thing that’s becoming abundantly clear is that the “AI application” companies that recognize the importance of the shift from good prompt engineering to great context engineering (i.e. how to best model, enrich, and retrieve domain specific context) early, will be the ones with the best shot at winning their categories.

- The strongest apps will understand the underlying data most precisely and build rich affordances + pipelines to feedback user generated metadata into their living, breathing data model.
- The data model (or ontology as Palantir would call it) can become a compounding asset. There has to be a semantic foundation underpinning it - a model of entities, relationships between them, and rich metadata that shapes how information should be prioritized and interpreted.
- Metadata ends up being the biggest source of unlock in today’s systems vs. an arguable nice to have in deterministic software. How will you accumulate and structure interesting metadata?
- Advanced systems are evolving into architectures that combine dense embedding retrieval with symbolic filters, graph traversal, metadata-aware reranking and summarization. They understand not only what to retrieve but why it’s relevant and how it fits into a broader reasoning chain.
- This shift is especially important for agentic systems. Agents need to “show their work” and expose what information they retrieved, how it informed their reasoning, and which evidence supports their decisions. That transparency isn’t a UX layer. It depends on structured, contextualized data under the hood. Provenance and replayable reasoning both emerge from sound data modeling.
- The most effective applications also close the loop between user behavior and retrieval performance. Every edit, clarification or correction becomes signal for context quality. With time, rerankers, query reformulators, and embedding clusters evolve to reflect real usage.
- If done correctly, your app can literally do things that others’ cant. It can answer many, many net new questions and will of course win on the most important enterprise (purchasing) metric today - time to trust.