Prompt engineering focuses on instructions and examples. Context engineering also decides which records, history, tool definitions, and tool results enter the active request. Memory addresses what persists and how it returns later. These responsibilities overlap in an agent application.
Example: for a support question, provide the applicable policy and order details that the user is authorized to access. Supplying the entire customer database adds irrelevant information and creates an access problem. Choosing scope is part of the system design.
For long tasks, preserve goals and constraints while managing growing history. In episode 53, at 36:33, Richmond Alake discusses compression in the active window and retrieval from an external store. His terminology differs somewhat from other systems, so the important distinction is what remains in context and what must be fetched.
Context also needs maintenance after launch. In episode 75, at 45:14, WisdomAI CPO Kapil Chhabra calls this the context development lifecycle: gather the context an organization has documented, make it usable by agents, and watch for business definitions that change. In his earlier example, the system surfaces evidence that a shared definition may be out of date, and a subject-matter expert decides whether to revise it. WisdomAI sponsored that interview, and the lifecycle is Chhabra’s name for this maintenance work rather than an industry standard.
Conor’s context essay gives a concrete example of excessive tool output. Measure whether a context change improves task results; more input and a more elaborate architecture are not benefits on their own.
See AI vocabulary in plain English for this term alongside the other language of models, data, agents, and infrastructure.
Hear it from the guest
“How do you know which information to compact, right? How do you prompt the LLM to do the right selection of signals and the right compression, right? That's context engineering.”
“The main ideas that I love in context engineering is the ability to compress the conversation history”
“But the context development life cycle is, starts with how do we gather all the context that has been documented in the organization”
Quotes lightly edited to remove filler words.
Sources
- Anthropic: Effective context engineering — Describes iterative curation of instructions, tools, evidence, and history.
- Kapil Chhabra: Two truths and a lie about context layers — Chhabra calls the context development lifecycle (CDLC) a term he uses for the lifecycle of organizational context; WisdomAI is his employer.
Go deeper
- What is the difference between prompt, context, and memory engineering? AI, decoded · Prompt vs. Context vs. Memory Engineering
- What is context in an AI agent? AI, decoded · The 5 Sources of Context an AI Agent Needs
- What is a context window in AI, and why does it fill up? AI, decoded · What a Context Window Is, and Why It Fills Up
- What is context poisoning, and how do you stop it? AI, decoded · Context Poisoning: Why Good Models Still Fail
From the conversation
-
The AI Framework Era Is Over: Why Context Is the Moat | Jerry Liu of LlamaIndex -
Context Poisoning is Killing Your AI Agents: How to Stop it | Michel Tricot, Airbyte -
Agent Memory: The Last Battleground in the AI Stack | Richmond Alake, Oracle -
From Demo to Defensibility: How to Build an AI Business that Lasts | Aurimas Griciūnas -
Why Context Alone Isn't Enough for Enterprise AI Agents | WisdomAI CPO Kapil Chhabra -
Architecting AI Agents: The Shift from Models to Systems | Aishwarya Srinivasan -
How Intercom Cut $250K/Month by Ditching GPT for Open Models | Fergal Reid -
Explaining Eval Engineering | Galileo's Vikram Chatterji