Knowledge Compilation Beats Vector Search: Why LLM-Based Agents Need Structured Memory

Industry consensus has favored vector-based retrieval (RAG) for AI knowledge management, but emerging evidence shows that structured knowledge compilation—where raw information is transformed into coherent, interconnected representations—dramatically outperforms simple search. This shift matters because it directly impacts agent reliability: as AI systems become more autonomous, understanding the relationships and context of knowledge becomes more critical than retrieval speed, fundamentally changing how organizations should build enterprise AI systems.