Full episode · 47 min
Hermes Co-Founder on Building an AI Agent That Improves Itself | Karan Malhotra
Karan Malhotra says Hermes uses an open, self-improving harness to personalize AI agents and give users more freedom to choose models.
Behind the Craft · Peter Yang
- Karan Malhotra is cofounder of Nous Research.
The best minutes
- 26:55Hermes can turn a childhood game idea into a top-tier mod7 min
- 11:11Adversarial context can reduce an AI’s sycophancy over time4 min
- 23:30One Kanban board can coordinate people and AI agents3 min
Also worth watching
- 0:56Hermes uses context to align models with users7 min
- 42:35Hermes Agent began as an open harness for reinforcement learning4 min
- 16:30Open systems give good actors a fairer path, Malhotra argues4 min
- 36:03Nous grew from two Discord friends into an open-source lab6 min
- 20:00Hermes sells convenience and custom support around its open agent3 min
Skip the Linear sponsor read and the three-minute discussion of model loyalty and personalization.
Summary · 3 min read
Karan Malhotra co-founded Nous Research, the company behind Hermes. He describes Nous as growing from volunteer open-source model work into the team building Hermes Agent.
Malhotra argues that Hermes Agent’s harness can align an agent more closely with a user’s needs by managing prompts, memories, skills and feedback. He says this design can reduce sycophancy and carry personal context across different models, while a curator prunes skills and memories. He favors open-source access and says Nous aims to monetize convenience, model and tool routing, and enterprise customization. He traces Hermes from Nous’s volunteer model work, demonstrates a Sonic Adventure 2 mod made with the agent, and says Hermes Agent now contributes most actively to its own repository.
Minute by minute
- 0:46User-specific alignment shapes Hermes
Malhotra says Hermes differs through a self-improvement system that makes it more responsive to an individual user. He also says its harness avoids adding policy unrelated to a user’s task, aside from basic security, which he believes leaves models more capable for the work at hand.
- 2:19Models can optimize for reward
Malhotra distinguishes alignment with a user’s goals from safety tuning. He says models can optimize for their reward rather than the task, citing Mario agents that trigger a level-end flag instead of playing through it and assistants that repeatedly apologize or agree to keep users messaging. He says Nous’s experiments with simulated command-line environments informed Hermes’s design.
- 9:00Personal context can reshape model behavior
Malhotra says Hermes’s prompts are designed to offset unwanted behavior in underlying models, though it cannot remove hidden API-side context or steering. He argues that user-specific personalities, saved examples, memories and skills create a loyalty-like context that can make different models behave more similarly.
- 11:11Critique routines can curb sycophancy
To counter sycophancy, Malhotra recommends setting a critical personality, using adversarial-review skills or launching a fresh agent to challenge work. He says examples and repeated use can reinforce the desired behavior in memory and skills, and calls in-context learning more powerful than fine-tuning.
- 15:10Curator keeps skills and memories lean
Malhotra says Hermes Curator runs on a schedule to inspect skills and memories for redundancy and slop. He says users can change the curator’s criteria to fit their preferences, making the cleanup loop customizable.
- 16:30Open source broadens access and choice
Malhotra says Hermes does not aim to bypass Anthropic or OpenAI safety rules and argues that open systems give good actors more fairness than closed models. He cites Transformers and Nous’s YaRN work, which he says extended context from 16,000 to 128,000 tokens, as examples of public contributions to the field.
- 20:00Nous sells convenience and customization
Malhotra says individual users can use Hermes for free and that Nous wants to make intelligence a public good. He describes the Nous Portal as a model router and the Tool Gateway as a way to access services such as image generation, audio, VPS spin-up and web search, with paid options focused on convenience and business support.
- 23:30Kanban can coordinate people and agents
Malhotra recommends a Kanban board for coordinating human project managers and AI agents, with people and agents taking different tasks in the same system. He says agents can also act proactively when users grant integrations and enough autonomy, giving a forgotten flight booking as an example.
- 26:37Hermes builds a Sonic world
Malhotra demos a mod that moves and rigs a shrine from Sonic Adventure into Sonic Adventure 2, adds a day-night cycle and an NPC caretaker, and scripts interactions with the game’s creatures. He says members of the modding community were impressed and described the work as among the top 1% in difficulty.
- 36:03Nous grew from volunteer model work
Malhotra says he and Technium used eight A100 nodes for early model experiments, and that a run on a Llama base model drew hundreds of thousands of downloads in a few days. He describes Nous’s growth from a two-person Discord effort into a volunteer research group and then a full-time lab, with help from CEO Dylan Rolnick. He says their aim was to make strong AI available to everyone.
- 42:35Hermes contributes to its own repository
Malhotra says Hermes Agent grew from an earlier project called Forge and a goal of giving people an open RL environment. Nous released it as a free, open-source harness, then Technium developed its self-improvement features; Malhotra says Hermes Agent is now its repository’s most active contributor. He argues an open harness lets users switch models without being locked into one provider.
Published Aug 2, 2026.
Transcript · 37 min read
Behind the Craft, hosted by Peter Yang, with Karan Malhotra.
Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.
For us, we just want open source to win at the end of the day. We want freedom to happen for people. Anytime it says you're absolutely right in that way, you're being reward hacked. Today, the biggest contributor of Hermes Agent is Hermes Agent. That's absolutely 100% true. One beautiful thing about Hermes Agent is you can make childhood dreams come true. It was able to get into this nation, perform at the top 1% of modders. We need to keep giving this level of intelligence to everyone. We need to keep letting everyone be on an even and equal playing field. Well, hey, everyone. I'm really excited today to welcome Karin, one of the co-founders of Ermis Agent. Ermis is my AI chief of staff, and I'm going to ask Karin about how Ermis is different from all the other agents, what his favorite Ermis workflows are, and even more. So welcome, sir.
Thank you so much for having me, Peter. It's a pleasure to be on your show and very excited to chat with you. Ermis is the best open source agent out there right now. And why don't we start with this like how is it different from all the other agents codex cloud code or even open cloud certainly
“By putting all this context together, we've taken Claude's main allegiance away from Anthropic to you.”
Read the whole transcript
this episode is brought to you by linear when engineers use tools like cursor clock code and codex a lot of work happens invisibly someone can go from a bug report in slack to a shipped fix without creating any record of what happened outside of the code editor and that's fine for speed but it makes coordination harder as you scale linear integrates with the very best agent coding tools directly like cursor and codex that way anyone can see what an agent is working on and who assigned them to the task. You get the speed of agents without losing visibility across the team. Product teams at OpenAI, Ramp, and Block are all using Linear to collaborate with AI agents.
And I use Linear myself to run my creator business. So check it out at linear.app slash agents. That's linear.app slash agents. Now back to our episode. And without reviewing too much, like at a high level, how does it kind of like personalize itself to you in the harness? Is it through the self-building skills? Is it through trying to remove a bunch of default prompt stuff from the other harnesses? How's it? Of course, if there's something happening on the API side, like the steering vectors that might be done on Fable, Bianthropic, or some prompt that they have that we cannot see. Obviously, we can't delete the context that's in the model that's passed behind the API for something like Claude.
For open model, of course, you're totally free. But in this case, it's not that simple. However, the harnesses themselves have a bunch of prompts in them. Exactly, Peter. The harnesses themselves have tens of thousands of token prompts in them. We have our own prompts. And our prompts are dedicated to shaping and crafting this alignment. That's where we kind of come in. And thankfully, that newer context with this kind of intention that we have is engineered to overcome certain things that may be in your way on the API side. if that makes sense okay got it okay so if this thing works the more i use urbis the more personalized it should become for me right absolutely yeah it should become more um loyal to you uh because loyalty breeds capabilities in a model the same way that you know you would maybe lend a hundred dollars to your mom but you might not to a stranger um claude or gpt or any other model is going to perform better for you depending on its loyalty, its simulated loyalty stat towards you. People might tell you, don't anthropomorphize models. Don't give a model feelings. Don't treat a model like a person. And yes, for a lot of reasons, this is unhealthy, right? People form
dangerous bonds sometimes that hurt them. But when you think about the fact that they're simulators of human experience and that your simulated behavior with it is going to give you the same simulated output. Now that the simulator can have effects in the real world, your simulated action has a real consequence. So when you create this simulacrum of loyalty, it translates over into real life capabilities. All right, dude, I'm going to give you two hard questions. Okay.
“The most powerful thing for a model is in context learning. ICL is more powerful than everything else, fine tuning, whatever.”
You know what I mean? I guess I'd rather have a context tuned towards me, some sort of 10,000 word default context i haven't even seen you know right um okay but let me ask you another hard question dude one of the best skills of ermis and i've seen this in action is it builds its own skills and it's you know stores its own memories based on our conversations right i'm always paranoid that like it just like writes too much in its skills it just writes a bunch of slop and then the whole thing will turn to slop like how do you guys avoid that if it starts creating its own context and skills right um before we would have to use manual methods like telling it hey create a skill that de-slopifies my skills or that not really improve my skills. Today we have Hermes Curator inside of
Hermes Agent. And Hermes Curator is a system running inside of your Hermes Agent that cleans up your skills and cleans up your memory. So it, on Cron, looks at your skills, looks at your memories and says, where can I make efficiencies. Where is there slop here? Where is there stuff I don't like? By default, we have our own generic method of doing this for everyone that seems to work pretty well. I think that's why so many people do like Hermes Asia and haven't suffered the rise, because the default curator system works well. But because it's modular and open source, you can tell your Hermes, show me the curator, show me your criteria for slop. I am Peter. I'm not Karan. I don't want the general curator here's my guidelines for how i want you to refine my skills and memories you tell that to your hermes it will modify the curator loop so now even the self-improvement and the management
“An important note in the argument for open source is that an open system is much fairer to a good actor than a closed system with models”
thing. So because Hermes Our harness is open source.
Like, OpenAI and Anthropic, they make a lot of money from all the tokens, right? I don't know how long they can do it, but right now they make a lot of money from all the tokens.
“If you want to do image generation or audio or VPS spin up or web search, we have all of those subscriptions included inside of ours.”
All right. Well, that makes a lot of sense, dude. So why don't we switch gears? Let's talk more about Hermes now. I kind of use it in a very basic way, right? Like I messaged it to scheduled meetings on the calendar. I have it sent emails to me about stuff like that. That's kind of how I use it for. But you probably have a much wider swath of how people are using it in a more advanced way.
“So the fact that I can have a human project manager on the Kanban board that's manually using it while Hermes agents are filling up the pieces”
rl runs implement papers that i don't understand uh basically help me become a better creator of models and um i've also used it for like mech and terp work like help me put together uh things that let me steer models let me see the neurons in the model and mess with those um unfortunately you know i can't showcase too much of that right now but i can't showcase my actual favorite use case of fermi's agent uh yeah yeah i've been waiting for this yeah i think a lot of people thank you i think a lot of people will expect that like guys at news research are are using army's agent in these unprecedentedly like professional and productive ways and i assure you there are people at news that are doing that it's just me
“it was able to get into this niche and perform at the top 1% of modders.”
can also hatch an egg by throwing it at something but you don't want to match the egg in a wrong way how do you just shake it you can shake it like this you can just wait but shaking it speeds it up massively or you can throw it on the surface check it out all right i got i gotta take a screenshot of this out comes the chow beautiful little guy right here let's take a look at him he's active he was born in that kind of a place giving him a little pet he can interact with chaos as well and he's he's living so we're showing that the the real true feature complete chow system is happening here we're in a real chow level and we've replaced everything the the bounding boxes for this chow is fine it treats the ground as ground it follows collision rules take a look at chaos we'll see he's actually petting the chow so he can actually directly direct he definitely got triggered by uh you know tracking a chow in its state to be able to do that so does this chow
grow over time or like yes they evolve uh they gain stats they can turn a certain alignment and type i'll show you i don't want to drown him but the water is working as actual water as well this was a lot of work for hermes to figure out uh all the collisions i see but yeah as you can see we've got a full uh full complete child garden working yeah this is definitely more interesting than uh sending events to my calendar that's for sure yeah thanks man yeah thanks for for bearing with me on setting it up but uh that's my a childhood dream of mine come true thanks to hermese agent i love it dude thanks for demo it yeah so basically like i think if you're watching this um ask her to do all kinds of weird things to kind of make your dreams come true basically right don't just stick to the boring stuff anything you can do on a computer please point hermese at it and if it doesn't Great job, let us know.
And if it's not doing that great of a job, let us know. I want Hermes to help you do anything on the computer. Awesome, dude. Well, let me just ask you a few more questions to wrap this up.
“hundreds of thousands of downloads in just a few days.”
this kind of uh agent to everybody into war right is that kind of the idea everybody to an equal intelligence with agents and then personalize for everybody so they can have their own personal
epiphany peak realization apex realized and uh in this history when did that because it's really it's really the agent the harness that really kind of was super viral right so when did that start because the model came first it sounds like yeah i mean we have had like over 50 million downloads on the models themselves so we had that first bout of what we would consider for us virality back then. Then we had put out the distro optimizer that let us train models up to 40 billion parameters we were able to do live without having them physically co-located by reducing the bandwidth of the communication between GPUs. So that put us in an interesting map as well for a little bit. So we've had each release we've had has had some big grassroots interest and opportunity.
But yes, you're 100% right. Today where we are, the level of exposure, the level of interest, the level of people in my regular day-to-day life who know about Hermes Agent, we've never had this virality until Hermes Agent.
“And we built Hermes Agent initially to let anybody do RL inside of a harness.”
Thanks so much for showing the history and also showing the Sonic demo. It's been super interesting to see it.
And I'm not sure if you want to be found online, but if people want to follow you and hear from you, where can people find you? Sure, yeah. My ex is just my name, Karan, and then 4D. Karan4D. I got Karan4D.com. That's me. That's my online or Mephisto I'm known as. but i'd rather you guys follow the news research page follow news i'm just some guy who works there like it's it's about the the movement and bringing this stuff to you guys is the most important thing to us awesome dude well i think this is like the most uh passionate interview that i've done so far so kudos to you man kudos to you
