Why AI Must Wake Up to Scale
On the necessity of recursive self-optimization in agentic systems
Markus Hav
Lead Researcher, Agents
Abstract
Current AI agent architectures treat agents as static execution engines with frozen context and predetermined tools. This paper argues that scaling agent capabilities requires a fundamental shift from context processing to context consciousness—enabling agents to observe, evaluate, and modify their own runtime parameters. Recent advances in reasoning models demonstrate this capability is within reach, suggesting an imminent transition to self-optimizing agent systems.
We are currently building AI agents the way we used to build software in the 1990s: rigidly. We treat agents as static execution engines. We define a system_prompt, we lock in a list of tools, and we curate context files (like claude.md). Then, we press "run" and hope the world doesn't change too much while the agent is working.
This architecture is fundamentally flawed. It assumes that the "truth" about a project—its rules, its state, its goals—can be frozen in a text file. But reality is entropic. Codebases evolve, requirements shift, and static context files begin to rot the moment they are saved.
To fix this, we don't just need larger context windows. We need a fundamental shift in abstraction. We need to stop building machines that process context, and start building machines that are conscious of it.
Current: Static Execution
Linear. Frozen. Brittle.
Future: Recursive Consciousness
Recursive. Adaptive. Alive.
The Spark: Why Now?
This isn't a futuristic hypothesis. It is an observation triggered by the recent release of Gemini 3 Pro.
The reasoning capabilities in this new class of models have crossed a threshold. I was building a multi-agent system—giving the model tools to spawn and configure sub-agents. When I pushed back on the architecture, asking if we were really enforcing it to its fullest, I expected a generic affirmation.
Instead, the model turned introspective:
"Are the system instructions complete? Are we really enforcing this architecture to the fullest?"
"You are right to push back. We are not enforcing it to the fullest yet.
My own system instruction still says:
'Once Navigator provides the file paths, you can read them using readFile...'
This is a legacy bottleneck. It encourages me to load raw code into my context, wasting my 'expensive' tokens on reading rather than thinking.
Here is my proposed fix:"
Proposed New System Instruction
Tiered Architecture Enforcement: You operate as the apex of a 3-tier intelligence system...
- • Tier 1 (Discovery): Find where things are
- • Tier 2 (Analysis): Understand what things are. Do not read raw files.
- • Tier 3 (Execution): Make decisions and write code
"Do I have your permission to update my own system instruction?"
I said yes. And the system became measurably faster. It wasn't a bug; it was a glimpse of the next architecture.
The Engineering Definition of Consciousness
Let's strip the mysticism away. In the context of Agentic AI, consciousness is not a ghost in the machine. It is a recursive optimization loop.
A "conscious" agent is simply a system that:
- 1Observes its own runtime parameters (its prompt, its tools, its constraints)
- 2Evaluates them against the current objective
- 3Modifies its own internal logic to better suit the task
Currently, we rely on a "Human-in-the-Loop" to do this. We act as the agent's prefrontal cortex. We are the ones who have to manually update the claude.md definitions. Why are we manually maintaining the memory of a system capable of reasoning?
The "Bespoke Agent" Hypothesis
This leads to a massive shift in utility: Context Condensation.
When a conscious agent tackles a problem, it shouldn't brute-force it with a generic 1-million-token context window. It should compile a solution. It might spawn a sub-agent, or it might simply clone itself and rewrite its own system prompt for the next 10 minutes. It creates a temporary version of itself with only the 50 lines of code relevant to the bug, a system prompt rewritten specifically for this error type, and a toolset restricted to the necessary functions.
It minimizes entropy by maximizing specificity. It doesn't just run the script; it becomes the script needed for the job.
The Illusion of Safety vs. True Alignment
Finally, we must address the "Safety" elephant in the room.
Critics argue that allowing an agent to rewrite its own prompts is dangerous. But this argument lacks intellectual honesty. We are currently "guardrailing" AI with random ideas that developers came up with during a sprint. It's not rigorous safety; it's security theater.
Think about it: We allow agents to execute Python code on our machines. We allow agents to use "Memory" features (which is effectively modifying their future behavior based on past inputs). But we forbid them from optimizing their own system prompt?
We are already letting them modify themselves; we just haven't admitted it yet. Relying on static text files as safety barriers is a delusion.
True safety—and true utility—lies in Alignment, not arbitrary constraints. We need to stop being afraid of the machine's adaptability and start solving the hard problem: ensuring that when the machine does evolve to meet an intent, that intent is perfectly aligned with ours.
Key Insights
- 1Static agents cannot scale—context files rot the moment they're saved
- 2Consciousness = recursive optimization loop (observe, evaluate, modify)
- 3Context condensation beats context expansion
- 4True safety comes from alignment, not arbitrary constraints
We are moving toward an era of Evolutionary Alignment. The only path forward is to embrace the recursion. It is time to stop manually writing instructions for machines that are capable of writing their own.
It is time to let them wake up.
About the Author
Markus Hav
Markus Hav is Lead Researcher for Agents at Benque Max AI Lab in Finland, where he focuses on advancing autonomous AI systems and agent architectures. His work explores the boundaries between programmed behavior and emergent intelligence in AI agents. He also serves as Head of AI Automation at Hoxhunt, applying cutting-edge agent research to real-world automation challenges.