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 in a position to distill smaller fashions on the similar stage of intelligence that beforehand required a a lot greater mannequin. Inference is getting cheaper. GPUs are getting quicker. And also you’ve bought all of those developments converging.”
Simply how briskly is that this taking place?
In accordance 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 appear like youngster’s play.
In reality, when you in contrast the 2, you’d be shocked at how significantly better the GPT-4.o mini mannequin is in the present day. It causes higher, provides extra correct responses and hallucinates far lower than GPT-3.
But, GPT-3 price 100X what GPT-4.o mini prices to run in the present day. Meaning AI isn’t simply beating Moore’s Regulation, it’s blowing it away.
This implies we may very well be nearer to Synthetic Common Intelligence (AGI) prior to 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 progress 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 true 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 in opposition to something smarter.
It seems Kurzweil underestimated how shortly we may arrive at AGI. In reality, 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 way 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.
Take into accout, this analysis was printed even earlier than intelligence prices fell dramatically. And likewise manner 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 checks over time.
He noticed that the typical IQ rating had been bettering for generations, roughly three factors per decade.
This rise in measured intelligence is now referred to as the Flynn Impact, and it was thought to consequence from components like higher schooling, improved vitamin and extra stimulating environments.
However current research recommend that American IQ scores are experiencing a phenomenon generally known 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 checks taken between 2006 and 2018, revealing drops in IQ scores throughout a number of classes.
Curiously, scores in spatial reasoning (3D rotation) usually 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, schooling 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 People have gotten much less clever.
There are lots of legitimate explanation why our collective IQ may very well be dropping in these areas.
It may mirror adjustments in how folks have interaction with data or carry out on particular sorts of checks.
I’d wager that adjustments in schooling high quality and emphasis on sure expertise over others within the classroom performs a component too.
Even adjustments in perceived societal values may have an effect on check efficiency. Heck, folks simply may not be motivated to carry out properly on these checks anymore.
However whereas all these components 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 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 staff. Not its baristas. The corporate’s white-collar staff.
It was the newest addition to a troubling pattern…
Unemployment for college-educated staff is rising quicker than for different teams, and their wage progress can be lagging.
The massive query is whether or not these are simply short-term fluctuations, or if data work is going through 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 more moderen job losses are because of the 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 consider we’re witnessing a “significant transition in the way in which work is finished,” as Carl Tannenbaum, the chief economist at Northern Belief just lately informed the New York Instances.
He says: “I inform folks a wave is coming.”
And that wave is already hitting some industries exhausting.
At this 12 months’s Sport Builders Selection Awards, the host highlighted “file 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 exhausting by layoffs for a couple of years now. In accordance with layoffs.fyi, over 19,000 tech staff have already been laid off for the reason that starting of 2025.
A part of that is because of the trendy company playbook shifting towards leaner cross-functional groups.
Amazon’s mannequin — the place staff juggle duties throughout coding, advertising and different fields — is gaining traction. Firms like Starbucks and Nissan cite related effectivity targets of their current layoffs.
However I consider that the plummeting price of intelligence can be a giant issue right here.
As I famous on the high, AI’s functionality is rising exponentially whereas its worth drops by an element of 10 annually.
And as companies proceed to embrace AI, demand for data staff 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 current examine discovered that AI-assisted software program builders boosted productiveness by greater than 25%, with the largest beneficial properties amongst junior coders.
That is virtually sure to erode the wage premium for skilled builders. It would additionally make some jobs redundant.
In spite of everything, novices may 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 very smart folks had been in a position to do.
However what does it say concerning the worth of human intelligence if AI can out of the blue 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 on the reducing price 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.
Meaning professionals in historically steady fields may very well be going through 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 surprise what sort of future my younger daughters face. What is going to the job market appear 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 foundations of the sport are altering.
And as AI continues to evolve, the financial worth of human intelligence could also be beneath menace.
Regards,
Ian KingChief Strategist, Banyan Hill Publishing
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