NLP & Language · intermediate · concept 88 of 176
Context Engineering
The practice of deciding what occupies a model's context window on each call: system instructions, tool definitions, retrieved documents, and prior turns. Once an agent runs for many steps the binding constraint stops being prompt wording and becomes the budget of useful tokens, so compaction, summarising older turns, keeping notes outside the window, and retrieving just in time matter more than phrasing.
Key terms
CompactionJust-in-time retrievalToken budgetSub-agentsContext rot
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Where you meet it in the real world
Long-running coding agents, research assistants, customer support over long histories
Videos
▶ What Is Context Engineering? Why It Matters for AI Agents ↗
IBM Technology · YouTube
▶ Context Engineering vs. Prompt Engineering: Smarter AI with RAG & Agents ↗
IBM Technology · YouTube
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