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 degree of intelligence that beforehand required a a lot greater mannequin. Inference is getting cheaper. GPUs are getting quicker. And also you’ve obtained all of those developments converging.”
Simply how briskly is that this occurring?
In keeping with Weil: “The price of intelligence is coming down by one thing like 10X a 12 months.”
Take into consideration what which means.
We have 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, if you happen to in contrast the 2, you’d be shocked at how a lot better the GPT-4.o mini mannequin is at the moment. 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 the moment. Which means AI isn’t simply beating Moore’s Legislation, it’s blowing it away.
This implies we could possibly be nearer to Synthetic Basic Intelligence (AGI) earlier than we predict…
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 also called synthetic common intelligence, or AGI.
The actual worry 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 in opposition to something smarter.
It seems Kurzweil underestimated how rapidly we might arrive at AGI. The truth is, analysis means that we’ve been persistently underestimating its arrival.
A 12 months in the past, Ark Analysis revealed this chart illustrating this truth. If the forecast error for AGI continues, we could possibly 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.
Remember, this analysis was revealed even earlier than intelligence prices fell dramatically. And likewise means earlier than DeepSeek modified the calculus on what is feasible.
I imagine we’re probably even nearer to AGI than we predict.
However how are people faring with AGI proper across the nook?
Are We Getting Dumber?
James Flynn is an intelligence researcher who, in 1980, revealed analysis about how individuals carried out on IQ checks over time.
He noticed that the common IQ rating had been bettering for generations, roughly three factors per decade.
This rise in measured intelligence is now known as the Flynn Impact, and it was thought to outcome from components like higher training, improved vitamin and extra stimulating environments.
However latest research counsel that American IQ scores are experiencing a phenomenon referred to as the “Reverse Flynn Impact”.
In different phrases, our IQ scores are taking place.
A examine revealed within the journal Intelligence analyzed 394,378 scores on intelligence checks 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 abilities.
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 the explanation why our collective IQ could possibly be dropping in these areas.
It might mirror adjustments in how individuals have interaction with info or carry out on particular kinds of checks.
I’d wager that adjustments in training high quality and emphasis on sure abilities over others within the classroom performs a component too.
Even adjustments in perceived societal values would possibly have an effect on take a look at efficiency. Heck, individuals simply won’t be motivated to carry out properly on these checks anymore.
However whereas all these components are probably 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 info, we is likely to be utilizing our brains much less for deep considering.
In different phrases, as our machines are getting smarter, it’s fairly potential 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 newest addition to a troubling development…
Unemployment for college-educated employees is rising quicker than for different teams, and their wage development can also be lagging.
The large query is whether or not these are simply short-term fluctuations, or if data 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
After all, a number of the more moderen job losses are as a result of Trump administration’s price range cuts at federal companies and analysis establishments.
Johns Hopkins College, which is dependent upon federal funding, introduced 2,000 layoffs this month alone.
However many consultants imagine we’re witnessing a “significant transition in the best way work is completed,” as Carl Tannenbaum, the chief economist at Northern Belief just lately informed the New York Occasions.
He says: “I inform individuals a wave is coming.”
And that wave is already hitting some industries arduous.
At this 12 months’s Sport Builders Alternative Awards, the host highlighted “document layoffs” within the online game trade.
The finance sector can also 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 dwelling 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 keeping with layoffs.fyi, over 19,000 tech employees have already been laid off for the reason that starting of 2025.
A part of that is as a result of fashionable 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 targets of their latest layoffs.
However I imagine that the plummeting value of intelligence can also be a giant issue right here.
As I famous on the prime, AI’s functionality is rising exponentially whereas its worth drops by an element of 10 every year.
And as companies proceed to embrace AI, demand for data employees will plummet. Particularly if hires are anticipated to tackle a number of roles, which would require AI to assist streamline their workflow.
Simply take a look at how AI is already affecting coding.
A latest examine discovered that AI-assisted software program builders boosted productiveness by greater than 25%, with the largest good points amongst junior coders.
That is nearly sure to erode the wage premium for skilled builders. It can additionally make some jobs redundant.
In spite of everything, 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 have been in excessive demand. Many individuals thought coding was one thing that solely very smart individuals have 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’ll be able to inform, I’m having a little bit of an existential disaster about intelligence.
The optimist in me seems to be on the decreasing value of intelligence as a boon for humanity.
However I’m additionally a realist.
And as AI turns into cheaper and extra highly effective, plainly the worth of human intelligence in routine data work is quickly diminishing.
Which means professionals in historically steady fields could possibly be dealing with an unsure future.
Harvard labor economist Lawrence Katz warns that whereas unemployment amongst faculty 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 below risk.
Regards,
Ian KingChief Strategist, Banyan Hill Publishing
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