 Solution

Every point in the affine search space is uniquely $x_k=x_0+V_{k}y$, since the columns of $V_k$ form a basis. Its linear-system residual is $r_k=r_0-A{V}_{k}y$, so minimizing the residual is exactly the linear least-squares problem ${\min }_y\Vert r_0-A{V}_{k}y{\Vert }_2$.

Use the standard starting choice $v_1=r_0/\Vert r_0{\Vert }_2$ and an orthonormal extended basis $V_{k+1}$. If $A{V}_k=V_{k+1}{L}_k$, then $r_0=V_{k+1}(\Vert r_0{\Vert }_2{e}_1)$ and orthonormality givesThe starting-vector choice is needed for this particular $e_1$ representation; an arbitrary orthonormal basis need not have those initial coordinates.

The Arnoldi iteration constructs the basis. At column $j$, orthogonalize $A{v}_j$ against $v_1,\dots ,v_j$, recording coefficients $h_{ij}=v_i^{T}A{v}_j$; normalize the remaining vector with $h_{j+1,j}$ to get $v_{j+1}$. This makes $L_k$ an upper Hessenberg matrix of size $(k+1)\times k$. The resulting GMRES algorithm starts from $x_0,r_0$, grows this Arnoldi basis, solves the small least-squares problem, and sets $x_k=x_0+V_{k}y$. Its small residual norm provides the stopping test. Incremental Givens rotations efficiently update the small QR decomposition instead of solving it anew. Zero initial residual means the system is already solved; Arnoldi breakdown gives an invariant subspace and, for nonsingular $A$, permits exact solution within it.