Comment by sdenton4

CoT gives the model more time to think and process the inputs it has. To give an extreme example, suppose you are using next token prediction to answer 'Is P==NP?' The tiny number of input tokens means that there's a tiny amount of compute to dedicate to producing an answer. A scratchpad allows us to break free of the short-inputs problem.

Meanwhile, things can happen in the latent representation which aren't reflected in the intermediate outputs. You could, instead of using CoT, say "Write a recipe for a vegetarian chile, along with a lengthy biographical story relating to the recipe. Afterwards, I will ask you again about my original question." And the latents can still help model the primary problem, yielding a better answer than you would have gotten with the short input alone.

Along these lines, I believe there are chain of thought studies which find that the content of the intermediate outputs don't actually matter all that much...