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 similar degree 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 tendencies converging.”
Simply how briskly is that this taking place?
In response to Weil: “The price of intelligence is coming down by one thing like 10X a 12 months.”
Take into consideration what meaning.
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 to be youngster’s play.
Actually, for those who in contrast the 2, you’d be shocked at how a lot better the GPT-4.o mini mannequin is immediately. 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 immediately. Which means AI isn’t simply beating Moore’s Regulation, it’s blowing it away.
This implies we might be nearer to Synthetic Normal Intelligence (AGI) before 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 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 robust superintelligence.
That is also called synthetic basic intelligence, or AGI.
The true worry is that people have all the time 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. Actually, 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 might be a system far more clever than us by the top of subsequent 12 months.
If the present forecast is well-tuned, we’re 2030.
Take into account, this analysis was printed even earlier than intelligence prices fell dramatically. And likewise approach earlier than DeepSeek modified the calculus on what is feasible.
I imagine we’re doubtless 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, printed analysis about how individuals carried out on IQ assessments over time.
He noticed that the typical 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 schooling, improved vitamin and extra stimulating environments.
However current research recommend that American IQ scores are experiencing a phenomenon often called 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 assessments taken between 2006 and 2018, revealing drops in IQ scores throughout a number of classes.
Apparently, 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 abilities.
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 Individuals have gotten much less clever.
There are various legitimate the reason why our collective IQ might be dropping in these areas.
It might replicate modifications in how individuals interact with data or carry out on particular varieties of assessments.
I’d wager that modifications in schooling high quality and emphasis on sure abilities over others within the classroom performs an element too.
Even modifications in perceived societal values may have an effect on take a look at efficiency. Heck, individuals simply may not be motivated to carry out properly on these assessments anymore.
However whereas all these elements are doubtless 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 is likely to be utilizing our brains much less for deep pondering.
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 staff.
It was the newest 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 massive query is whether or not these are simply short-term fluctuations, or if information 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 newer job losses are as a result of Trump administration’s funds cuts at federal companies and analysis establishments.
Johns Hopkins College, which is determined by federal funding, introduced 2,000 layoffs this month alone.
However many specialists imagine we’re witnessing a “significant transition in the best way work is finished,” as Carl Tannenbaum, the chief economist at Northern Belief not too long ago instructed 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 Recreation Builders Selection 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 lower 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 response to layoffs.fyi, over 19,000 tech staff 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 tasks throughout coding, advertising and different fields — is gaining traction. Firms like Starbucks and Nissan cite comparable effectivity objectives of their current layoffs.
However I imagine that the plummeting value of intelligence can be a giant issue right here.
As I famous on the high, 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 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 current examine discovered that AI-assisted software program builders boosted productiveness by greater than 25%, with the most important positive aspects amongst junior coders.
That is nearly sure to erode the wage premium for knowledgeable 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 extremely smart individuals have been capable of do.
However what does it say in regards to the worth of human intelligence if AI can all of the sudden 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 appears 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, evidently the worth of human intelligence in routine information work is quickly diminishing.
Which means professionals in historically secure fields might be dealing with an unsure future.
Harvard labor economist Lawrence Katz warns that whereas unemployment amongst school 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 to be 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 underneath menace.
Regards,
Ian KingChief Strategist, Banyan Hill Publishing
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