Fact is the first structured point of connection between Reality and governance within the Information Loop. The key principle is that AI does not directly access Reality itself. Instead, it perceives or estimates the state of the world through observations and information representations derived from Reality.

In the real world, countless events occur simultaneously across human activity, healthcare, transportation, manufacturing, and society. AI operates on information brought into digital environments through documents, databases, images, user inputs, cameras, LiDAR, microphones, and other sensors. Even an AI system with a World Model does not access Reality itself, but represents or estimates the state of the world from such observations.

In I2EA, information that has been observed or recorded in a form that governance can reference is treated as Fact. The statement “I understand reality through fact.” therefore does not mean that AI possesses a complete understanding of Reality. Rather, it emphasizes that mediation always exists between AI and Reality, through Observation, recording, information representation, estimation, or similar processes.

This makes the separation between Fact and Evaluation essential. A record stating that “the temperature is 38°C,” “a contract contains a particular clause,” or “a patient has taken a particular medication” is different from evaluating that information as “dangerous,” “inappropriate,” or “requiring additional action.” The former is treated as Fact; the latter belongs to Evaluation. This separation helps prevent observed information from being conflated with judgments about that information.

Incoming Tags represent Facts entering the governance structure as structured information, allowing them to connect to subsequent Evaluation, Policy, and Decision processes.

Importantly, Fact does not mean absolute Truth. A Fact may still depend on its Source, time of acquisition, method of recording, completeness, and whether estimation was involved. It must therefore be connected with Provenance and Context so that governance can trace where the information came from, when it was obtained, and under what conditions it existed.

Fact is therefore the starting point of the Information Loop, connecting information derived from Reality to governance and providing the foundation for subsequent Evaluation and Policy.