Context is Environment

Two lines of work are taking center stage in AI research. On the one hand, increasing efforts are being made to build models that generalize out-of-distribution (OOD). Unfortunately, a hard lesson so far is that no proposal convincingly outperforms a simple empirical risk minimization baseline. On the other hand, large language models (LLMs) have erupted as algorithms able to learn in-context, generalizing on-the-fly to the eclectic contextual circumstances. We argue that context is environment, and posit that in-context learning holds the key to better domain generalization. Via extensive theory and experiments, we show that paying attention to context$\unicode{x2013}\unicode{x2013}$unlabeled examples as they arrive$\unicode{x2013}\unicode{x2013}$allows our proposed In-Context Risk Minimization (ICRM) algorithm to zoom-in on the test environment risk minimizer, leading to significant OOD performance improvements. From all of this, two messages are worth taking home: researchers in domain generalization should consider environment as context, and harness the adaptive power of in-context learning. Researchers in LLMs should consider context as environment, to better structure data towards generalization.