The study investigates the kinetics and thermodynamics of phase segregation and nanoconfined fluid O₂ formation in a lithium-rich oxide cathode (Li₁.₂₋ₓMn₀.₈O₂). Using a combination of ab initio molecular dynamics and cluster expansion-based Monte Carlo simulations, the researchers identify a kinetically accessible and thermodynamically favorable mechanism for O₂ molecule formation in the bulk, involving Mn migration and interlayer oxygen dimerization. At the top of charge, the cathode structure locally phase segregates into MnO₂-rich regions and Mn-deficient nanovoids, which contain O₂ molecules as a nanoconfined fluid. These nanovoids form a percolating network, potentially allowing long-range oxygen transport and linking bulk O₂ formation to surface O₂ loss. The findings highlight the importance of developing strategies to kinetically stabilize the bulk structure of lithium-rich oxide cathodes to maintain their high energy densities.The study investigates the kinetics and thermodynamics of phase segregation and nanoconfined fluid O₂ formation in a lithium-rich oxide cathode (Li₁.₂₋ₓMn₀.₈O₂). Using a combination of ab initio molecular dynamics and cluster expansion-based Monte Carlo simulations, the researchers identify a kinetically accessible and thermodynamically favorable mechanism for O₂ molecule formation in the bulk, involving Mn migration and interlayer oxygen dimerization. At the top of charge, the cathode structure locally phase segregates into MnO₂-rich regions and Mn-deficient nanovoids, which contain O₂ molecules as a nanoconfined fluid. These nanovoids form a percolating network, potentially allowing long-range oxygen transport and linking bulk O₂ formation to surface O₂ loss. The findings highlight the importance of developing strategies to kinetically stabilize the bulk structure of lithium-rich oxide cathodes to maintain their high energy densities.