Earlier this month, a video was posted of OpenAI‘s CPO, Kevin Weil, speaking about how briskly the price of intelligence is dropping.
As he put it: “We’re capable of distill smaller fashions on the identical stage of intelligence that beforehand required a a lot greater mannequin. Inference is getting cheaper. GPUs are getting sooner. And also you’ve bought all of those developments converging.”
Simply how briskly is that this occurring?
In line with Weil: “The price of intelligence is coming down by one thing like 10X a 12 months.”
Take into consideration what meaning.
We had been all amazed when Chat GPT-3 was launched on November 30, 2022. However a mere 30 months later, present AI fashions make these seem like youngster’s play.
The truth is, for those who in contrast the 2, you’d be shocked at how significantly better the GPT-4.o mini mannequin is at present. It causes higher, offers extra correct responses and hallucinates far lower than GPT-3.
But, GPT-3 value 100X what GPT-4.o mini prices to run at present. Meaning AI isn’t simply beating Moore’s Regulation, it’s blowing it away.
This implies we may very well be nearer to Synthetic Basic Intelligence (AGI) ahead of we expect…
Is AGI Across the Nook?
In 2005, the futurist Ray Kurzweil predicted a technological singularity by the 12 months 2045.
That is the purpose when technological development turns into uncontrollable and irreversible, leading to unknown penalties for human civilization.
He predicted that an AI would enter a loop of successive self-improvement cycles, inflicting an explosion in intelligence, culminating in a strong superintelligence.
That is often known as synthetic common intelligence, or AGI.
The actual concern is that people have at all times been the apex predator of the clever meals chain and we’ve by no means needed to compete towards something smarter.
It seems Kurzweil underestimated how shortly we might arrive at AGI. The truth is, analysis means that we’ve been constantly underestimating its arrival.
A 12 months in the past, Ark Analysis printed this chart illustrating this truth. If the forecast error for AGI continues, we may very well be taking a look at a system rather more clever than us by the tip of subsequent 12 months.
If the present forecast is well-tuned, we’re taking a look at 2030.
Be mindful, this analysis was printed even earlier than intelligence prices fell dramatically. And likewise means earlier than DeepSeek modified the calculus on what is feasible.
I consider we’re doubtless even nearer to AGI than we expect.
However how are people faring with AGI proper across the nook?
Are We Getting Dumber?
James Flynn is an intelligence researcher who, in 1980, printed analysis about how folks carried out on IQ exams over time.
He noticed that the common IQ rating had been enhancing for generations, roughly three factors per decade.
This rise in measured intelligence is now known as the Flynn Impact, and it was thought to consequence from elements like higher training, improved vitamin and extra stimulating environments.
However current research recommend that American IQ scores are experiencing a phenomenon referred to as the “Reverse Flynn Impact”.
In different phrases, our IQ scores are happening.
A examine printed within the journal Intelligence analyzed 394,378 scores on intelligence exams taken between 2006 and 2018, revealing drops in IQ scores throughout a number of classes.
Curiously, scores in spatial reasoning (3D rotation) typically improved from 2011 to 2018.
However scores decreased in verbal reasoning, visible problem-solving, analogies and computational/mathematical expertise.
The decline was noticed throughout age teams, training ranges and genders, with the steepest drops amongst youthful and less-educated test-takers.
Naturally, these findings are regarding. However they don’t essentially imply that Individuals have gotten much less clever.
There are lots of legitimate explanation why our collective IQ may very well be dropping in these areas.
It might replicate adjustments in how folks interact with data or carry out on particular forms of exams.
I’d wager that adjustments in training high quality and emphasis on sure expertise over others within the classroom performs an element too.
Even adjustments in perceived societal values would possibly have an effect on take a look at efficiency. Heck, folks simply won’t be motivated to carry out nicely on these exams anymore.
However whereas all these elements are doubtless at play, the largest potential issue that issues me is our technological dependence.
I fear that as we proceed to rely extra on smartphones and AI to retailer and course of data, we is perhaps utilizing our brains much less for deep pondering.
In different phrases, as our machines are getting smarter, it’s fairly doable we’re getting dumber.
What Occurs in an AGI World?
Final month, Starbucks introduced layoffs affecting over 1,000 company workers. Not its baristas. The corporate’s white-collar employees.
It was the most recent addition to a troubling pattern…
Unemployment for college-educated employees is rising sooner than for different teams, and their wage development can be lagging.
The massive query is whether or not these are simply short-term fluctuations, or if information work is dealing with a extra everlasting shakeup.
Final Could, unemployment rose above 4% for the primary time in two years. And it has remained over that mark ever since.
Supply: U.S. Bureau of Labor Statistics as of February 28, 2025
In fact, a number of the newer job losses are as a result of Trump administration’s finances cuts at federal companies and analysis establishments.
Johns Hopkins College, which depends upon federal funding, introduced 2,000 layoffs this month alone.
However many specialists consider we’re witnessing a “significant transition in the best way work is completed,” as Carl Tannenbaum, the chief economist at Northern Belief lately instructed the New York Instances.
He says: “I inform folks a wave is coming.”
And that wave is already hitting some industries arduous.
At this 12 months’s Recreation Builders Alternative Awards, the host highlighted “report layoffs” within the online game trade.
The finance sector can be slashing its workforce. Unemployment in finance-related jobs jumped about 25% from 2022 to 2024.
Wells Fargo, for instance, has reduce jobs for 16 straight quarters, with its residence lending division seeing a virtually 50% discount since 2023.
And the tech trade has been hit particularly arduous by layoffs for a number of years now. In line with layoffs.fyi, over 19,000 tech employees have already been laid off because the starting of 2025.
A part of that is as a result of trendy company playbook shifting towards leaner cross-functional groups.
Amazon’s mannequin — the place workers juggle obligations throughout coding, advertising and different fields — is gaining traction. Corporations like Starbucks and Nissan cite comparable effectivity objectives of their current layoffs.
However I consider that the plummeting value of intelligence can be an enormous issue right here.
As I famous on the prime, AI’s functionality is rising exponentially whereas its value drops by an element of 10 every year.
And as companies proceed to embrace AI, demand for information employees will plummet. Particularly if hires are anticipated to tackle a number of roles, which would require AI to assist streamline their workflow.
Simply have a look at how AI is already affecting coding.
A current examine discovered that AI-assisted software program builders boosted productiveness by greater than 25%, with the largest positive factors amongst junior coders.
That is nearly sure to erode the wage premium for knowledgeable builders. It is going to additionally make some jobs redundant.
In any case, novices might quickly have AI do the majority of coding for them.
And that brings us again to Kevin Weil of OpenAI. He simply got here out with a prediction that AI will surpass people in aggressive coding this 12 months.
A mere two years in the past, software program engineers had been in excessive demand. Many individuals thought coding was one thing that solely extremely smart folks had been capable of do.
However what does it say concerning the worth of human intelligence if AI can abruptly code higher than people?
Right here’s My Take
As you possibly can inform, I’m having a little bit of an existential disaster about intelligence.
The optimist in me seems on the reducing value of intelligence as a boon for humanity.
However I’m additionally a realist.
And as AI turns into cheaper and extra highly effective, it appears that evidently the worth of human intelligence in routine information work is quickly diminishing.
Meaning professionals in historically steady fields may very well be dealing with an unsure future.
Harvard labor economist Lawrence Katz warns that whereas unemployment amongst school grads isn’t alarmingly excessive but, “it could be within the subsequent six months.”
It makes me marvel what sort of future my younger daughters face. What’s going to the job market seem like in 5 years… a decade?
As soon as we obtain synthetic superintelligence, will there even be a labor market in any respect?
All I do know is that the principles of the sport are altering.
And as AI continues to evolve, the financial worth of human intelligence could also be beneath risk.
Regards,
Ian King
Chief Strategist, Banyan Hill Publishing
Editor’s Be aware: We’d love to listen to from you!
If you wish to share your ideas or solutions concerning the Each day Disruptor, or if there are any particular matters you’d like us to cowl, simply ship an electronic mail to [email protected].
Don’t fear, we received’t reveal your full title within the occasion we publish a response. So be at liberty to remark away!
