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I don't think this is true. The way I understand is that there's

1. coarse grained processing

2. fine grained processing

Tokens are coarse grained processing. While I agree that during a token generation, that processing is fine grained.

But Looping is fine grained processing or reasoning and it is not limited to discrete tokens within passes. This is qualitatively different because a lot more "stuff" happens between tokens. You are right that it is similar to a larger model but then even COT is similar to using a larger model.

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