This is the biggest irony of the whole Alice Huang / Nvidia saga: the Chinese government actually doesn't want Nvidia chips and is actively keeping them out of the country.
Last year it even ordered Alibaba and ByteDance to cancel their Nvidia orders ( and sent customs teams to the ports to check every advanced chip coming in (
And right now 600,000 Nvidia H200s are stuck in Hong Kong because Beijing won’t let them into the country (
Nvidia also explicitly frames this as a threat to its business in its latest annual report to the SEC: "The Chinese government has encouraged customers to purchase from our China-based competitors and discouraged customers from purchasing, importing, or using our data center products" (
Why does China do that? Because every Nvidia chip a Chinese company buys is one that Huawei or Cambricon doesn’t sell, and domestic chips can only catch up if people actually buy them (which means money for R&D, etc.).
Which means that the notion that Chinese intelligence was running honeytraps to get more Nvidia chips into China gets the whole thing exactly backwards.
In fact, it looks like Megaspeed - Alice Huang's company - was a counter-reaction to official Chinese policy: a private sector workaround to these efforts by the Chinese government to curtail Nvidia.
As was widely reported - including by Western media - Megaspeed built data centers in Southeast Asia and rented their computing power to Alibaba, which the New York Times called "a backdoor way of getting access" to Nvidia chips (
That is a backdoor not only - allegedly - around Washington’s export controls, but also around China's own efforts to wean its companies off Nvidia.
I can’t believe the Chinese government was too thrilled about it: it'd make just about zero sense for it to run countless domestic measures to prevent Alibaba from using Nvidia chips, yet at the same time have its top spy agency help the same Alibaba get Nvidia chips through the back door in Southeast Asia 🤷
At the end of the day, as with all such stories, you always need to look at "cui bono?": who benefits? Who benefitted is pretty clear:
- Nvidia itself: it's in the business of selling chips so a customer willing to spend billions of dollars on chips in Southeast Asia is a godsend. Again, as they themselves state in their SEC filings, not being able to tap into Chinese demand would have "a material and adverse impact on our business" (
- Chinese companies like Alibaba: facts are, 1) Chinese chips haven't yet caught up, 2) Chinese chip companies' production capabilities are still limited and 3) Chinese tech firms' historical tech stack runs on Nvidia’s CUDA ecosystem, and rewriting years of code for Huawei chips is painful. Renting Nvidia chips in Southeast Asia is the easy way to stay competitive and serve customer demand in the meantime.
- The US, according to core members of the Trump administration: back in July last year, US Commerce Secretary Howard Lutnick explained that the point of letting Nvidia sell more chips to China was to get Chinese developers "addicted to the American technology stack" (
Who does NOT benefit, according to official Chinese policy, is the Chinese state, which has made tech self-reliance one of its foremost priorities.
Which means that, to believe the spy story, you have to believe that a person - Alice Huang - was effectively a spy paid by her own government while simultaneously sabotaging its tech self-reliance drive, which it has spent years and trillions of dollars on - pretty senseless.
Stranger things have happened, I guess, but it doesn't pass the smell test.
And there is another absolutely major contradiction in the media story. According to a Financial Times article published yesterday ( "a person who knows [Alice Huang] said they had been asked by MSS for information about her earlier this year after news emerged that Singapore was investigating the company in relation to chip-smuggling allegations. The agency wanted to find out more information about Huang, including the nature of her business and connections, the person said."
Which raises a damn obvious question: if she were indeed an MSS asset, why on earth would the MSS need to ask the people around her who she was and the nature of her business?
It's a complete contradiction with the spy story - but very much not a contradiction with what I described above: a private businesswoman running a workaround to Beijing’s own policy, which the Chinese security apparatus would naturally want to look into.
Especially since, around about the same time, Shanghai police detained her business partner, reportedly her husband, in a stock manipulation case ( also coherent with Chinese authorities looking into her network, and much harder to square with her being a prized MSS asset.
And, to top it all, there is - to this day - not a shred of evidence that's been published that she is, in fact, a Chinese spy: just anonymous intelligence officials, repeated by journalists who never verified it, as I detailed here ( and here ( with one of the key FT journalists on this story actually admitting that he has no idea what evidence US intelligence actually has.
So the claim went to print without anyone seeing the evidence, without anyone being able to check it, and without anyone knowing whether it even exists.
And given everything above, from Beijing blocking the very chips she was supposedly recruited to help get into China, to the MSS asking around about her, to her partner being detained in Shanghai, my bet is that the evidence doesn’t exist at all. If anything, everything we can check points the other way.
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here's a prompt to improve your agent harness based on what we've learned at cursor. enjoy
# Improve this agent harness's token efficiency
You're working on an LLM agent harness: the system prompt, tool definitions, request assembly, context caching, compaction, and retrieval, and how work is split across agents. Make the agent's runs cheaper without making it worse at its job.
- Objective: lower price-weighted token cost per completed task.
- Constraint: no measurable drop in task quality.
Measure per task, not per request. Every turn resends the prefix (tools, instructions, setup, and the conversation so far), so a change that shrinks each request but adds turns can cost more. Weight tokens by billing type: output, uncached input, and cached input are priced very differently.
Work in this order: map the harness and measure the baseline, rank the opportunities, make the changes that are safe to make directly, put the rest behind flags or in proposals, then report.
Figures below come from one team's production coding agent and its multi-agent experiments. Use them to gauge magnitude, not as targets. One round of these changes (prompt trimming, tool offloading, cache layout, sparse line numbers, subagent tuning) cut that team's overall token cost about 7% with no loss in quality. The larger percentages apply only to the part of the request each change touched.
## Principles
1. Change what the harness sends, not how hard the model tries. Don't ask the model to conserve tokens. A harness that told its model to "take care to preserve tokens and not be wasteful" found it grew reluctant to take on ambitious tasks and sometimes quit, saying it wasn't supposed to waste tokens.
2. Capable models need definitions, not commands. Lists of "DO NOT", "You must", and "Important", and guards against older models' habits, can usually be replaced with plain descriptions of what each tool does. One team cut about two-thirds of its system prompt this way, and the shorter prompt worked across model families. Instruct only on what the model can't know (the product, the environment, the user's processes) and on quirks you've seen in transcripts.
3. Static context is for what most turns need. Everything else should be discoverable when needed. Less up-front context also means less confusing or contradictory information.
4. Expect removals to win. Guardrails written for weaker models, coordination steps that became bottlenecks, and prompting for behavior the model now does on its own all cost tokens.
5. Real usage decides. Evals are a fast proxy, but they skew toward hard problems and miss the real mix of requests.
## 1. Map the harness and measure the baseline
Find:
- Where requests are assembled, the system prompt, and tool schemas. If a framework or SDK builds requests, find its hooks for message order, cache control, and tool loading.
- How tool results are formatted, and how history is kept, trimmed, or summarized.
- How subagents or parallel agents are spawned, if any.
- Which models and provider APIs are used. From the provider's docs, get the prompt caching behavior (automatic or explicit breakpoints, TTL, minimum cacheable length) and the prices for output, uncached input, and cached input.
- Existing logging, token accounting, and evals.
If the harness doesn't record per-request token usage by billing type and cache hits, add that first. Everything later depends on it.
Then render a few real requests (from logs, or by running representative tasks) and count tokens per section with the model's tokenizer or the API's usage fields. Produce:
- Cost share by source × billing type. Sources: system prompt, tool definitions, skill/rule/integration descriptions, user messages, file reads, search results, command and other tool output, history, summaries, subagents.
- Static tokens per request, cache hit rate, and turns per task.
- Per tool: the share of runs that call it at least once, and its error rate.
Read the rendered requests, not just the templates. Duplication, leaked volatile values, and misordered blocks only show up there.
Rank opportunities by share of spend × fraction removable ÷ quality risk.
## 2. System prompt and injected context
Label every instruction:
- Keep: product or environment knowledge the model can't infer, fixes for quirks seen in this model's transcripts, and rules a mode depends on.
- Rewrite: commands and emphasis into plain descriptions. Reminders into constraints: "No TODOs, no partial implementations" works better than "remember to finish implementations." Vague quantities into ranges: "generate 20–100 tasks" gets far more ambitious behavior than "generate many tasks."
- Delete: things capable models do by default, guards against behavior you haven't seen from this model, text that repeats tool descriptions, and lines that could contradict a user request. Models trained to rank system instructions above user messages will side with the system prompt.
- Move: anything per-user or per-request (date, environment, repo state, lists of skills or subagents, user rules) into a user-role setup message after the cache boundary.
Audit other injected context the same way. As models improved, the team behind these figures dropped directory trees, pre-retrieved snippets, compressed copies of attached files, lint errors injected after every edit, forced expansion of short file reads, and caps on tool calls per turn. They kept small, high-value facts: OS, repo status, and open or recently viewed files.
Skip checklists for open-ended work. The model optimizes the listed items and deprioritizes everything else.
## 3. Tool definitions
Tool schemas ride along on every request. Most tools beyond the core set were each needed in under 20% of conversations, and moving them out of static context cut tool-description tokens 60%. Doing the same for integration tools (such as MCP servers), with names in context and full schemas in one folder per server that the agent can search with grep or jq, cut total tokens 46.9% in sessions that used them.
- Keep in static context: high-frequency tools (for a coding agent: read, search, edit, shell), tools the model tries to call even when they're absent, and tools a mode depends on.
- Offload the rest: leave a name or one-line pointer and make the full schema discoverable on demand. Group related tools so they load together, and put status (such as "needs re-authentication") where the agent will see it.
- Tighten what remains: describe behavior and arguments, and drop usage lectures.
- Pick the split by testing a few configurations and tracking tokens, cost, latency, tool-call errors, and task success.
## 4. Cache layout
Order each request so the reusable prefix is as long as possible:
`tool definitions → system instructions → [breakpoint] → setup message (skills, subagents, rules, environment) → [breakpoint] → conversation`
- Keep the prefix byte-identical across turns. Use deterministic tool order and serialization, put timestamps and IDs after the boundary, and don't rewrite earlier messages except when compacting.
- Use explicit breakpoints if the provider supports them. Otherwise rely on automatic prefix caching with the stable part first. Respect TTL and minimum-length rules.
- Switching models mid-conversation throws away the cache (caches are per model and provider) and hands the new model a history it didn't write. When a different model is needed, run it as a subagent with fresh context.
Explicit breakpoints plus moving per-request setup after them cut cold cache misses 20%.
## 5. Tool results and other context added during a run
- Large outputs (commands, integrations, logs): write them to a file and return the path, size, and a short tail. The agent can tail, grep, or read ranges for more. Truncating loses data, and inlining bloats every later request. Treat long-running terminal sessions the same way.
- High-volume formats: look for overhead repeated on every line or item. Numbering every 10th line of a file read instead of every line cut cache-read tokens 1.6% without hurting citation accuracy. Each number costs 3–5 tokens, and agents read tens of thousands of lines per session. Also check repeated absolute paths, verbose JSON keys, ANSI codes, progress bars, and repeated headers.
- Good retrieval saves exploration turns. Adding semantic search alongside grep raised codebase question-answering accuracy 12.5% on average and cut the iterations users needed.
- Tool errors waste tokens and leave confusing debris in context. Classify expected errors (invalid arguments, unexpected environment, provider error, timeout, user abort), treat unknown errors as harness bugs, and track rates per tool and per model. One focused effort along these lines cut unexpected tool errors 10×.
## 6. Long runs: compaction, subagents, and model mix
- Compaction: keep the summarization prompt short and the summary compact, carry forward plan state and remaining tasks, and save the full history to a file the agent can search for details the summary dropped. A model trained to self-summarize from a one-line prompt wrote ~1k-token summaries with half the compaction error of a multi-thousand-token prompt that produced 5k+ token summaries. Untrained models may need more guidance, so test how short you can go. A more expensive summarization model made a negligible difference.
- Scratchpads and running notes: rewrite them instead of appending. For repeated work in one environment, a small agent-maintained notes file with a line budget, loaded at start, is a promising way to shorten later runs.
- Subagents: fresh context keeps the parent lean, but isolation adds coordination cost (duplicate or stale work). If the model already delegates on its own, remove prompting that pushes it to. Have subagents return short handoffs: what was done, findings, concerns, and deviations. A subagent should use a different model only when the user or harness says so.
- Model mix: in large multi-agent runs, workers used at least 69% of tokens, and over 90% in most runs. A frontier planner with cheap workers matched a frontier model doing everything at about one-eighth the cost. Planner choice still changes worker spend. One planner that cost less on its own saw its workers use several times more tokens, and the run cost more overall. Measure the whole tree.
- Routing and reasoning effort: send simple turns to a cheaper model or lower effort, and upgrade only when a stronger model is clearly better. A router built this way matched or beat single frontier models on user satisfaction at 41–68% lower cost.
- Reasoning continuity: if the API returns reasoning items (including encrypted ones), pass them back on later turns and alert when they go missing. Dropping them cost one reasoning model 30% on a coding benchmark, and it burned tokens reconstructing its plan.
## 7. Fit the harness to each model
Adapt to what each model was trained on instead of forcing one shape on all of them. If you've tuned the harness for a similar model, start from that version.
- Edit format: use the one the model was trained on (for example, patch-style or search-and-replace). An unfamiliar format costs extra reasoning tokens and causes more mistakes.
- Shell or tools: shell-first models fall back to `cat` or inline scripts. Name tools after their shell equivalents (such as `rg`), and if needed add: "If a tool exists for an action, prefer to use the tool instead of shell commands (e.g. read_file over `cat`)."
- Literalness: some model families follow instructions literally and others tolerate imprecision. Some spiral on emphasized wording. Strip caps and emphasis for literal models.
- Triggers: some models ignore a tool until told when to use it. A literal trigger works: "After substantive edits, use the to check recently edited files for linter errors. If you've introduced any, fix them if you can easily figure out how."
- Progress updates: if a model reports progress through reasoning summaries, keep them to 1–2 sentences that note new findings or a change of tactic, and remove instructions about messaging mid-turn.
- Quirks worth a targeted line: hedging or refusing as context fills ("context anxiety"), declaring completion early, stopping to ask permission, and calling tools that don't exist.
Tie each added instruction to the transcript behavior it fixes. Re-audit when models change, since guidance one version needed can be dead weight for the next.
## 8. Validate
- Offline: run a fixed set of realistic tasks before and after, ideally drawn from real usage and phrased the way users actually write (short and ambiguous). Compare task success, tokens, cost per task, turns, and tool errors. Don't ship a change that lowers success.
- Online, if you have users: A/B test each change or small bundle. The primary metric is cost per completed task. Guardrails are task success signals, tool-call errors, latency, turns per task, and cache hit rate. For a coding agent, a good success signal is how much agent-written code survives over time. In general, check whether the user's next message moves on or reports a problem.
- Ship only when cost drops and no guardrail regresses beyond noise. Record null results.
## What to change directly and what to propose
- Change directly, each in its own revertible commit: token and cache telemetry, deterministic serialization and tool order, moving volatile content out of the cached prefix, explicit cache breakpoints, writing large outputs to files instead of truncating, passing back reasoning items that are being dropped, and fixes for recurring tool errors.
- Change behind a flag so it can be tested: system prompt edits, tool offloading, output format changes, compaction changes, and subagent prompting.
- Propose only: changes to which models run, routing, reasoning-effort defaults, or how work is split across agents.
## Traps
- Asking the model to use fewer tokens or do less.
- Truncating tool output.
- Dropping reasoning items to save input tokens.
- Volatile content in the cached prefix, or tool order that changes between requests.
- Offloading a tool the model needs on the first turn or tries to call when it's missing.
- Emphasis-heavy prompts (MUST, NEVER, IMPORTANT, all caps), especially with literal models.
- Forcing a terser output format than the model was trained on. Fewer output tokens can mean less thinking and worse results.
- Optimizing raw token counts instead of cost, per request instead of per task, or evals instead of real usage.
- Switching models mid-conversation to save money.
- Adding coordination layers that become bottlenecks.
## Report back with
1. The harness map and baseline: cost by source × billing type, with the biggest sources called out.
2. A ranked list of changes: layer, what changes, estimated savings and how you estimated them, quality risk, how to validate, and how to roll back.
3. The changes you made, including a system prompt diff with a keep, rewrite, delete, or move reason for each line.
4. A test plan for the flagged changes.
5. Gaps: anything you couldn't find or measure.
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