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01 ·Inference & Serving·★ MEMBER·PAPER·8 min read Paper explained: BDH-CQ — an AI that thinks without words. Recurrent memory plus latent reasoning resets ARC's cost frontier BDH-CQ (arXiv:2608.09888) never verbalizes its intermediate reasoning: demonstrations are written into a recurrent memory, and the answer is computed by iterating in a high-dimensional latent space. A 150M-parameter model reaches 29.5% pass@2 on ARC-AGI-1 at $0.0007 per task, breaking the reported cost–accuracy Pareto frontier. We explain the paper using only its own text as evidence.