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TBPN · 3 min · Aug 7, 2025

Agents build context through repeated tool calls

Guillermo Rauch · CEO, Vercel

Guillermo Rauch defines an agent as a loop of tool calls that accumulates context.

In this episode

Full analysis
  1. 1:09:03ChatGPT emerged after OpenAI tested whether anyone would pay6 min
  2. 1:44:43OpenAI prioritizes adoption and compute over near-term cash flow5 min
  3. 3:08:28Post-training improvements made GPT-5 more reliablePro pick 5 min
  4. 1:18:07Test-time compute compounds with pretraining and reinforcement learning4 min
  5. 1:27:06AI agents may help with personal tasks people must coordinate themselves3 min
  6. 2:19:52Charlie wrote 98% of merged code in one August test4 min
  7. 2:37:44Agents build context through repeated tool calls3 min
  8. 3:31:26GPT-5 generated four to ten times more tokens in one test3 min
“to demystify the word agent, what an agent is, it's a loop of tool calling that builds up context over time.”
Guillermo Rauchat 2:38:03 · TBPN
2:38:03

Takeaways

  1. Tool-calling loops let agents build context and revise their work.
  2. Screenshots help V0 inspect and fix generated interfaces.
  3. MCP can connect agents to services such as Shopify and Stripe.

About this segment

Guillermo Rauch defines an agent as a loop of tool calls that accumulates context. He shows how screenshots and web research help Vercel’s V0 revise work, and describes MCP as a way to connect external tools.

Guillermo Rauch

CEO, Vercel

Founded Vercel, which created Next.js and the v0 AI tool for building websites.

  • John Coogan, Host · Co-host, TBPN

    Co-founded Soylent and Lucy; OpenAI bought his show TBPN in April 2026.

  • Jordi Hays, Host · Co-host, TBPN

    Founded Branded Native; co-founded fintech Capital, which Rho bought.

From “OpenAI LIVE: Greg Brockman, Mark Chen & More”, Aug 7, 2025. Watch the full episode

Transcript

From the transcript TBPN publishes with the episode.

  1. 2:37:52

    Yeah. There's a couple layers. Yeah. On the foundation model layer, what do you want is a model that is exceptional at tool calling. Mhmm. Whether it has built in tools or whether you register them yourself Mhmm. This is a, like, sort of silent war that has been going on. Like, if you talk to devs, what are you optimizing for? Tool calling quality. Why? Because to demystify the word agent, what an agent is, it's a loop of tool calling that builds up context over time. Mhmm. That's all an agent is. So let's to give you an example completely of b zero. B zero is becoming more and more agentic over time.

  2. 2:38:27

    One of the things that it can do is it can take a screenshot of the thing that's building and reflect on it. Mhmm. So today, I I live vibe coded to an audience of web three and crypto engineers, and they told VZero, hey. Make this dark mode. And initially, VZero dust me dirty. He's like, he changes some things with dark mode, and then it kinda astonished me because I was like, ugh, I have to explain to this audience. It then takes a screenshot, looks at it, and keeps fixing it.

  3. 2:38:57

    And I was like, this is literally a developer that's alive on autopilot. And the reason it's in autopilot is because he has access to these tools, like, looking at the web browser. Another one is research. I've I've coded an example of build me a Substack clone for cryptocurrency news, And the agent didn't know what the cryptocurrency news were, so he started doing research on the Internet of, okay, Ethereum passed certain price and whatever. So and then you're talking about the tools over the Internet.

  4. 2:39:27

    So to demystify another topic, MCP is really exciting because it's a new protocol for registering tools that your agent doesn't locally have. So those tools that I just talked about, we gave them to VZero. Here's a deep research tool. Here's the, screenshotting tool. And those are will likely become the new services when you think about, like, AWS of today. If if AWS was an AI cloud, which is kinda what we're trying to build at Vercel, like, you think a lot of those tools are gonna become as a service. Like, bring me deep research as a service, bring me browsing and screenshotting as a service, and so on. But then you have MCP, which allows you to okay. I need to sell something online. Alright.

  5. 2:40:07

    So now there's an MCP for Shopify. Now there is an MCP for Stripe. Mhmm. There's even crypto MCP. So it's really exciting. Like, now it's, like, the ultimate choice for a builder, and you don't have to go and learn all these things. You don't have to this is almost like a discontinuity of the Valley trend of, like, if we build amazing documentation, they will come. This is more so if the agent picks you, they will come. Right? And so there's a lot of, figuring out right now, like, how do I make my infrastructure?

  6. 2:40:36

    How do I make my product to be loved by these agents? And the MCP promises to be one of these first, things that you are in control of. That makes a ton of sense.