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 larger mannequin. Inference is getting cheaper. GPUs are getting quicker. And also you’ve bought all of those traits converging.”
Simply how briskly is that this occurring?
In accordance with Weil: “The price of intelligence is coming down by one thing like 10X a yr.”
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 appear like little one’s play.
In actual fact, for those who 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. Meaning AI isn’t simply beating Moore’s Regulation, it’s blowing it away.
This implies we could possibly be nearer to Synthetic Common Intelligence (AGI) earlier than we expect…
Is AGI Across the Nook?
In 2005, the futurist Ray Kurzweil predicted a technological singularity by the yr 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 basic 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 rapidly we might arrive at AGI. In actual fact, analysis means that we’ve been constantly underestimating its arrival.
A yr in the past, Ark Analysis revealed this chart illustrating this reality. If the forecast error for AGI continues, we could possibly be a system way more clever than us by the tip of subsequent yr.
If the present forecast is well-tuned, we’re 2030.
Take note, this analysis was revealed even earlier than intelligence prices fell dramatically. And likewise approach earlier than DeepSeek modified the calculus on what is feasible.
I imagine we’re possible 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, revealed 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 known as the Flynn Impact, and it was thought to outcome from elements like higher training, improved diet and extra stimulating environments.
However latest research counsel that American IQ scores are experiencing a phenomenon often known 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) 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, 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 modifications in how folks interact with data or carry out on particular varieties of checks.
I’d wager that modifications in training high quality and emphasis on sure expertise over others within the classroom performs a component too.
Even modifications in perceived societal values would possibly have an effect on take a look at efficiency. Heck, folks simply may not be motivated to carry out properly on these checks anymore.
However whereas all these elements are possible at play, the most important 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 may be utilizing our brains much less for deep considering.
In different phrases, as our machines are getting smarter, it’s fairly attainable 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 staff.
It was the most recent addition to a troubling development…
Unemployment for college-educated staff is rising quicker than for different teams, and their wage progress can 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 Might, 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 funds cuts at federal businesses and analysis establishments.
Johns Hopkins College, which relies on federal funding, introduced 2,000 layoffs this month alone.
However many consultants imagine we’re witnessing a “significant transition in the way in which work is completed,” 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 laborious.
At this yr’s Sport Builders Alternative Awards, the host highlighted “document 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 dwelling lending division seeing a virtually 50% discount since 2023.
And the tech trade has been hit particularly laborious by layoffs for just a few years now. In accordance with layoffs.fyi, over 19,000 tech staff have already been laid off because the 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 workers juggle duties 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 be an enormous issue right here.
As I famous on the prime, 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 have 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 most important features amongst junior coders.
That is nearly sure to erode the wage premium for knowledgeable builders. It should 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 yr.
A mere two years in the past, software program engineers have been in excessive demand. Many individuals thought coding was one thing that solely extremely smart folks have been in a position to do.
However what does it say in regards to the worth of human intelligence if AI can instantly code higher than people?
Right here’s My Take
As you may inform, I’m having a little bit of an existential disaster about intelligence.
The optimist in me seems 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, it appears that evidently the worth of human intelligence in routine data work is quickly diminishing.
Meaning professionals in historically secure 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 might 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 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 principles of the sport are altering.
And as AI continues to evolve, the financial worth of human intelligence could also be below menace.
Regards,
Ian King
Chief Strategist, Banyan Hill Publishing
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