In the interests of beautifying the output, wherever you want to include words in a LaTeX mathematics context, it should not be done like this: $f(AIXI\ output)$, but like this: $f(\mbox{\textit{AIXI output}})$. That will ensure that the word or phrase is properly kerned and spaced, instead of being treated like a sequence of one-letter mathematical symbols.
In the interests of beautifying the output, wherever you want to include words in a LaTeX mathematics context, it should not be done like this: $f(AIXI\ output)$, but like this: $f(\mbox{\textit{AIXI output}})$. That will ensure that the word or phrase is properly kerned and spaced, instead of being treated like a sequence of one-letter mathematical symbols.