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This week Miguel Fierro, a former Microsoft principal researcher who recently founded his own company, RecoMind, joined data and AI evangelist Christina Stathopoulos to talk about the state of recommendation systems. Christina also ran through the latest AI news she’s been watching, from Anthropic’s continued rise to responsible AI, announcements from Google’s I/O 2026 conference, and (continuing the discussion from last week) the growing backlash against tokenmaxxing as a productivity metric. Here are three takeaways from the conversation.
Recommendation systems are a bigger deal than most companies realize
Miguel has spent the better part of a decade building recommendation systems for enterprise customers at Microsoft, and he thinks most companies are leaving a lot on the table by not paying closer attention to recommendations. Amazon generates roughly 35% of its revenue through recommendations. Netflix attributes 75% of content consumption to them. Best Buy credits recommendations with 24% of revenue. TikTok’s entire user experience is a recommendation engine. And yet many large retailers he worked with at Microsoft weren’t investing seriously in the area, often because they weren’t tracking the value it was generating.
The gap between the top tier and everyone else is wide and getting wider. The most advanced systems today treat user behavior as a sequence prediction problem, similar to how large language models predict the next token. Rather than just encoding clicks, they encode all user actions into embeddings, run sequences through those representations, and use huge 1.5 trillion-parameter models to predict what a user will want next. That’s not something a mid-tier retailer can replicate today, but it signals where the field is heading.
Even if you don’t work in a top well-resourced company, you should still pay attention to the convergence of search and recommendations into a single personalized retrieval layer and the early application of foundation models to recommendation problems. Netflix has built what Miquel described as the only published foundation model in this space; Meta is rumored to be developing one as well. The barrier is data, particularly for smaller organizations. Unlike text, behavioral interaction data isn’t publicly available, so building at that scale requires both proprietary datasets and serious compute.
If you want to get your hands on state-of-the-art implementations, including knowledge graph-based approaches, without starting from scratch, Miguel suggested the open source Recommenders library, originally developed at Microsoft and now housed under the Linux Foundation, as a practical entry point.
The agent hype has a recommender-shaped hole in it
Miguel drew a distinction between true sales agents and what most companies offer today, which are usually just conversational agents. A conversational agent responds to what you say. An agentic sales system understands a customer, anticipates what they want, and surfaces the right product or offer at the right moment—and that requires a recommendation system baked in.
If your “agent” is a chatbot with access to a knowledge base, it’s not doing recommendation. Recommendation systems need training data, a retrieval layer, and a personalization model, none of which you get for free from a foundation model API. A language model can answer questions about a product catalog, but it can’t offer up personalized recommendations unless it also has a model of the customer’s preferences, history, and likely next action. Most companies don’t have the infrastructure in place to make that possible. . .yet.
The responsible AI conversation has left the research community
What’s notable about the responsible AI conversation right now is the range of institutions offering their perspective. Anthropic, alongside announcing a funding round pushing its valuation toward $1 trillion, urged a global pause on AI development tied to the risk of recursive self-improvement: systems that can design and develop their own successors. The Future of Life Institute published The Better Path for AI, a framework arguing for capability development oriented toward human benefit rather than human replacement. And the pope issued a formal encyclical focused on AI and the common good.
None of these institutions is making the same argument, but the convergence of their attention matters. Responsible AI used to be a specialized conversation happening largely within research labs and a small set of policy organizations. It’s now a topic where major AI companies, religious institutions, and civil society groups are all staking out public positions in the same news cycle.
For the technical community, this creates both pressure and opportunity. “We’re thinking about safety” is no longer a sufficient posture; external scrutiny is intensifying from directions that don’t share the field’s assumptions or vocabulary. But the broader conversation creates real demand for practitioners who can translate between what responsible AI actually requires in practice and what policymakers, executives, and institutions are trying to figure out. That translation work is increasingly where the field needs people.
What’s next
Join us Monday morning for the next episode of This Week in AI, where YK Sugi and John Lindquist will break down the massive structural and financial shifts reshaping the technology industry. (They’ll also chat about the recent release of Claude Fable 5.) And on July 23, Christina will be hosting the AI Superstream on AI harnesses, a four-hour event focused on agentic AI and the frameworks practitioners need to move from models to agents. Both are free to attend. Register now to save your seat.
For deeper reading on topics covered this week, Christina recommended three titles available on the O’Reilly learning platform: Hands-On LLM Serving and Optimization, Hands-On RAG for Production, and Large Language Models: The Hard Parts. Not a member? Sign up for a free 10-day trial to check them out.
We’ll continue to publish our takeaways here on Radar each Friday and share full episodes on YouTube, Spotify, Apple, or wherever you get your podcasts.
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