Diffusion Models

Opening — Why this matters now Collaboration is the final frontier of autonomy. As AI agents move from single-task environments to shared, unpredictable ones — driving, logistics, even disaster response — the question is no longer can they act, but can they cooperate? Most reinforcement learning (RL) systems still behave like lone wolves: excellent at optimization, terrible at teamwork. The recent paper PADiff: Predictive and Adaptive Diffusion Policies for Ad Hoc Teamwork proposes a striking alternative — a diffusion-based framework where agents learn not just to act, but to anticipate and adapt, even alongside teammates they’ve never met. ...

Opening — Why this matters now AI has already learned to compose music from scratch. But in the real world, musicians don’t start with silence—they start with a song. Editing, remixing, and reshaping sound are the true engines of creativity. Until recently, generative AI systems have failed to capture that nuance: they could dream up melodies, but not fine-tune a live jazz riff or turn a piano solo into an electric guitar line. ...

Most generative models for time series—particularly those borrowed from image generation—treat financial prices like any other numerical data: throw in Gaussian noise, then learn to clean it up. But markets aren’t like pixels. Financial time series have unique structures: they evolve multiplicatively, exhibit heteroskedasticity, and follow stochastic dynamics that traditional diffusion models ignore. In this week’s standout paper, “A diffusion-based generative model for financial time series via geometric Brownian motion,” Kim et al. propose a subtle yet profound twist: model the noise using financial theory, specifically geometric Brownian motion (GBM), rather than injecting it naively. ...

What if you could simulate thousands of realistic futures for the market, all conditioned on what’s happening today—and then train an investment strategy on those futures? That’s the central idea behind a bold new approach to portfolio optimization that blends score-based diffusion models with reinforcement learning, and it’s showing results that beat classic benchmarks like the S&P 500 and traditional Markowitz portfolios. ...