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AI Chaos: Code Stolen, RAG Fails, and Human-Level Intelligence?

AI advancements and security concerns dominated tech news this week, with developments ranging from AI coding tools to questions about artificial general intelligence.

A new report highlighted the limitations of Retrieval-Augmented Generation (RAG) systems when processing complex documents. According to VentureBeat on January 31, 2026, while many enterprises have deployed RAG systems with the promise of democratizing corporate knowledge, the reality has been "underwhelming" for industries dependent on heavy engineering. The article stated that standard RAG pipelines treat documents as flat strings of text, using "fixed-size chunking" that destroys the logic of technical manuals by slicing tables and severing captions from images.

Meanwhile, security researchers at BackKoi Research uncovered a significant threat in the VS Code marketplace. On January 22, 2026, Hacker News reported that two VS Code extensions, dubbed "MaliciousCorgi," were found to be harvesting code from 1.5 million developers. The extensions, disguised as AI coding assistants, exploited the access granted by users to their workspaces and files. "We install them without a second thought," BackKoi Research noted, emphasizing the risk of blindly trusting AI tools in official marketplaces.

In other AI news, Microsoft is reportedly favoring Anthropic's Claude Code internally, despite selling GitHub Copilot to its customers, according to a January 22, 2026, report by The Verge on Hacker News. Tom Warren, senior editor at The Verge, noted that developers have been comparing Claude Code, Anysphere's Cursor, and GitHub Copilot for months, with Claude Code "increasingly coming out on top."

The question of whether AI has achieved human-level intelligence was also addressed in a Nature News article. Published in 2026, the article cited a Turing test conducted in March 2025 where OpenAI's GPT-4.5 was judged to be human 73% of the time, even outperforming actual humans. The article concluded that "the answer looks like yes" to the question of whether machines can display the cognitive competence characteristic of human thought.

Outside of the AI realm, NPR reported on February 2, 2026, that the Education Department's efforts to fire staff cost taxpayers over $28 million. According to NPR, a government watchdog report revealed the significant expense incurred during the Trump administration's attempts to terminate employees.

AI-Assisted Journalism

This article was generated with AI assistance, synthesizing reporting from multiple credible news sources. Our editorial team reviews AI-generated content for accuracy.

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