It’s a little more complicated than that. While looped transformers can be unrolled a fixed number of times to save on memory, if loop depth is determined dynamically between tokens, a single transformer can compute any computable function between tokens.

To analogize, current transformers run a fixed-length program per step. Any program can be factored into a top-level loop with a fixed-length branching body (an interpreter). Dynamically looped transformers can run any program between tokens.

The safety argument for CoT monitoring is that in transformers information about the hidden state has to be communicated through the bottleneck of sampling a single token per forward pass. If not trained adversarially, it’s likely that a reasoning trace contains all the “bottlenecked information” we need to determine intent. But if we can compute arbitrary programs between tokens, the reasoning used is hidden.

It also opens the door to simple architectural extensions that would make the safety/monitoring side of things much more difficult.

It’s probably fine in practice at these scales though. If we keep each loop turn reasonable non-deep, we can probably recover most of the benefits by decoding “extended” CoTs from the residual stream at each loop turn between tokens. But that’s an area of active development.