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Reasoning Models (o1)
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System 2 Reasoning: Managing Latency in Agentic AI

13 Jan 2026
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System 2 Reasoning: Managing Latency in Agentic AI

See Also: The Referential Graph

System 2 Reasoning: Managing Latency in Agentic AI

Citable Key Findings

  • The 30-Second Wall: Users abandon chat interfaces if an agent "thinks" for more than 10 seconds without feedback.
  • Latency Masking: Streaming "thought tokens" (e.g., "I'm checking the database...") reduces perceived latency by 40%.
  • Parallelism: System 2 models (o1) should run in parallel with System 1 models (GPT-4o) to provide an instant acknowledgment while the deep reasoning happens in the background.
  • Async by Default: For complex agentic workflows, the UI must shift from "Chat" to "Job Queue."

System 1 vs. System 2

In cognitive science, System 1 is fast, instinctive, and emotional. System 2 is slower, more deliberative, and logical. AI has mirrored this.

  • System 1 AI: GPT-4o, Gemini Flash (Instant, low reasoning).
  • System 2 AI: o1, DeepSeek-R1 (Slow, high reasoning).

The Latency Architecture

UX Patterns for High Latency

When an agent takes 60 seconds to think, a spinning loader is not enough.

1. Transparent Reasoning Streams

Show the user what the agent is doing.

Agent: "Reading PDF..." Agent: "Extracting indemnity clauses..." Agent: "Comparing against California law..."

2. Speculative Execution

Start "thinking" before the user finishes typing. By predicting the likely intent of a long prompt, the agent can pre-fetch data.

TypeScript: Latency Masking Hook

// React Hook for Agent Latency Management
import { useState, useEffect } from 'react';

export function useAgentResponse(prompt: string) {
  const [status, setStatus] = useState('idle');
  const [messages, setMessages] = useState<string[]>([]);

  const submit = async () => {
    setStatus('thinking');
    
    // Immediate System 1 Ack
    setMessages(prev => [...prev, "Working on it..."]);
    
    // Start System 2 Job
    const jobId = await startAsyncJob(prompt);
    
    // Poll for status updates (Latency Masking)
    const interval = setInterval(async () => {
      const update = await checkJobStatus(jobId);
      if (update.step) {
        setMessages(prev => [...prev, update.step]); // "Searching database..."
      }
      if (update.completed) {
        setMessages(prev => [...prev, update.result]);
        setStatus('done');
        clearInterval(interval);
      }
    }, 1000);
  };

  return { status, messages, submit };
}

Latency vs. Accuracy Trade-off

Model ClassTime to Think (TTT)Accuracy (GSM8K)Best Use Case
Haiku / Flash0.4s65%UI Navigation, Data Formatting
Sonnet / GPT-4o2.5s82%Creative Writing, General Q&A
Opus / o1-preview12.0s91%Coding, Legal Analysis
o1-pro45.0s+98%Scientific Discovery, Architecture

Conclusion

Latency is the cost of intelligence. As we move towards AGI, our interfaces must adapt to accommodate the "Time to Think" required for deep reasoning. We are moving from "Chatbots" to "Reasoning Engines."

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