# Beyond the Context Window: A Cost-Performance Analysis of Fact-Based Memory vs. Long-Context LLMs for Persistent Agents

arXiv: https://arxiv.org/abs/2603.04814 · HTML: https://mlsanity.com/paper/2603.04814/

## Key facts

- Cited by 15 papers in the map (data through 14 Oct 2026).
- Placed in Agent memory systems, one of 16 directions in LLM agents and tool use.
- Builds on 21 of its 31 references that are in the map.
- First posted on arXiv 5 Mar 2026.

## Placed in

- LLM agents and tool use / [Agent memory systems](https://mlsanity.com/agents/agent-memory-systems/)

## Builds on (most cited first, 21 of 21)

- [Retrieval-Augmented Generation for Knowledge-Intensive NLP Tasks](https://mlsanity.com/paper/2005.11401/) (2020)
- [Gemini 2.5: Pushing the Frontier with Advanced Reasoning, Multimodality, Long Context, and Next Generation Agentic Capabilities](https://mlsanity.com/paper/2507.06261/) (2025)
- [Longformer: The Long-Document Transformer](https://mlsanity.com/paper/2004.05150/) (2020)
- [LongBench: A Bilingual, Multitask Benchmark for Long Context Understanding](https://mlsanity.com/paper/2308.14508/) (2023)
- [RULER: What's the Real Context Size of Your Long-Context Language Models?](https://mlsanity.com/paper/2404.06654/) (2024)
- [A-MEM: Agentic Memory for LLM Agents](https://mlsanity.com/paper/2502.12110/) (2025)
- [FrugalGPT: How to Use Large Language Models While Reducing Cost and Improving Performance](https://mlsanity.com/paper/2305.05176/) (2023)
- [Evaluating Very Long-Term Conversational Memory of LLM Agents](https://mlsanity.com/paper/2402.17753/) (2024)
- [Extending Context Window of Large Language Models via Positional Interpolation](https://mlsanity.com/paper/2306.15595/) (2023)
- [LongMemEval: Benchmarking Chat Assistants on Long-Term Interactive Memory](https://mlsanity.com/paper/2410.10813/) (2024)
- [Zep: A Temporal Knowledge Graph Architecture for Agent Memory](https://mlsanity.com/paper/2501.13956/) (2025)
- [Justice or Prejudice? Quantifying Biases in LLM-as-a-Judge](https://mlsanity.com/paper/2410.02736/) (2024)
- [∞Bench: Extending Long Context Evaluation Beyond 100K Tokens](https://mlsanity.com/paper/2402.13718/) (2024)
- [Humans or LLMs as the Judge? A Study on Judgement Biases](https://mlsanity.com/paper/2402.10669/) (2024)
- [Prompt Cache: Modular Attention Reuse for Low-Latency Inference](https://mlsanity.com/paper/2311.04934/) (2023)
- [LongT5: Efficient Text-To-Text Transformer for Long Sequences](https://mlsanity.com/paper/2112.07916/) (2021)
- [PersonaMem-v2: Towards Personalized Intelligence via Learning Implicit User Personas and Agentic Memory](https://mlsanity.com/paper/2512.06688/) (2025)
- [EverMemOS: A Self-Organizing Memory Operating System for Structured Long-Horizon Reasoning](https://mlsanity.com/paper/2601.02163/) (2026)
- [Don't Do RAG: When Cache-Augmented Generation is All You Need for Knowledge Tasks](https://mlsanity.com/paper/2412.15605/) (2024)
- [Beyond Dialogue Time: Temporal Semantic Memory for Personalized LLM Agents](https://mlsanity.com/paper/2601.07468/) (2026)
- [Tail-Optimized Caching for LLM Inference](https://mlsanity.com/paper/2510.15152/) (2025)

## Built on by (most cited first, 15 of 15)

- [User as Code: Executable Memory for Personalized Agents](https://mlsanity.com/paper/2606.16707/) (2026)
- [The Efficiency Frontier: A Unified Framework for Cost-Performance Optimization in LLM Context Management](https://mlsanity.com/paper/2605.23071/) (2026)
- [Grounded Continuation: A Linear-Time Runtime Verifier for LLM Conversations](https://mlsanity.com/paper/2605.14175/) (2026)
- [PROJECTMEM: A Local-First, Event-Sourced Memory and Judgment Layer for AI Coding Agents](https://mlsanity.com/paper/2606.12329/) (2026)
- [User as Engram: Internalizing Per-User Memory as Local Parametric Edits](https://mlsanity.com/paper/2606.19172/) (2026)
- [MemDelta: Controlled Baselines and Hidden Confounds in Agent Memory Evaluation](https://mlsanity.com/paper/2606.29914/) (2026)
- [Fortunate Recall: Ontology-Driven Memory Lifecycle Management for Persistent Coherence in LLMs](https://mlsanity.com/paper/2609.10413/) (2026)
- [The Workload-Router-Pool Architecture for LLM Inference Optimization: A Vision Paper from the vLLM Semantic Router Project](https://mlsanity.com/paper/2603.21354/) (2026)
- [Exploring Cross-Scenario Generality of Agentic Memory Systems: Diagnostics and a Strong Baseline](https://mlsanity.com/paper/2606.04315/) (2026)
- [MemSIF: From Structured Interactions to Dual-Track Fact Memory for LLM Agents](https://mlsanity.com/paper/2608.01742/) (2026)
- [SodaMem: Evidence-Grounded Temporal Graph Memory for LLM Agents](https://mlsanity.com/paper/2608.08055/) (2026)
- [When Stories Evolve: Benchmarking LLM Storytelling Across Agent Architectures in Open-Ended World Simulations](https://mlsanity.com/paper/2608.15654/) (2026)
- [RAG Deserves an Index: Why Ingest-Time Compilation Beats Query-Time Interpretation](https://mlsanity.com/paper/2608.20845/) (2026)
- [Unified AI Gateway: A Framework for Joint Model Routing and KV Cache Management](https://mlsanity.com/paper/2609.06940/) (2026)
- [When Evidence Changes: Evaluating Memory Repair and Re-reading in Language-Model Agents](https://mlsanity.com/paper/2610.03902/) (2026)

## Abstract (arXiv)

Persistent conversational AI systems face a choice between passing full conversation histories to a long-context large language model (LLM) and maintaining a dedicated memory system that extracts and retrieves structured facts. We compare a fact-based memory system built on the Mem0 framework against long-context LLM inference on three memory-centric benchmarks - LongMemEval, LoCoMo, and PersonaMemv2 - and evaluate both architectures on accuracy and cumulative API cost. Long-context GPT-5-mini achieves higher factual recall on LongMemEval and LoCoMo, while the memory system is competitive on PersonaMemv2, where persona consistency depends on stable, factual attributes suited to flat-typed extraction. We construct a cost model that incorporates prompt caching and show that the two architectures have structurally different cost profiles: long-context inference incurs a per-turn charge that grows with context length even under caching, while the memory system's per-turn read cost remains roughly fixed after a one-time write phase. At a context length of 100k tokens, the memory system becomes cheaper after approximately ten interaction turns, with the break-even point decreasing as context length grows. These results characterize the accuracy-cost trade-off between the two approaches and provide a concrete criterion for selecting between them in production deployments.