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 identical degree of intelligence that beforehand required a a lot greater mannequin. Inference is getting cheaper. GPUs are getting quicker. And also you’ve received 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 yr.”
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 at the moment. It causes higher, provides 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 Legislation, it’s blowing it away.
This implies we might be nearer to Synthetic Normal Intelligence (AGI) prior to 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 robust superintelligence.
That is also referred to as synthetic basic 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 towards something smarter.
It seems Kurzweil underestimated how rapidly we might arrive at AGI. Actually, analysis means that we’ve been constantly underestimating its arrival.
A yr in the past, Ark Analysis revealed this chart illustrating this truth. If the forecast error for AGI continues, we might be a system rather more clever than us by the tip of subsequent yr.
If the present forecast is well-tuned, we’re 2030.
Take into accout, 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 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, 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 end result from elements like higher training, improved vitamin and extra stimulating environments.
However latest research counsel 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 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.
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 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 People have gotten much less clever.
There are a lot of legitimate explanation why our collective IQ might be dropping in these areas.
It might replicate modifications in how folks have interaction with data or carry out on particular forms 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 won’t be motivated to carry out effectively on these checks 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 attainable 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 also 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 because of the Trump administration’s price range cuts at federal companies and analysis establishments.
Johns Hopkins College, which will depend on 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 completed,” as Carl Tannenbaum, the chief economist at Northern Belief just lately advised the New York Instances.
He says: “I inform folks a wave is coming.”
And that wave is already hitting some industries arduous.
At this yr’s Sport Builders Selection Awards, the host highlighted “report layoffs” within the online game business.
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 lower jobs for 16 straight quarters, with its residence lending division seeing a virtually 50% discount since 2023.
And the tech business 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 because of the fashionable company playbook shifting towards leaner cross-functional groups.
Amazon’s mannequin — the place staff juggle obligations throughout coding, advertising and different fields — is gaining traction. Firms like Starbucks and Nissan cite related effectivity objectives of their latest layoffs.
However I consider that the plummeting value of intelligence can also 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 latest examine discovered that AI-assisted software program builders boosted productiveness by greater than 25%, with the most important good points amongst junior coders.
That is virtually 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 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 very smart folks have been in a position to do.
However what does it say concerning the worth of human intelligence if AI can all of a sudden 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 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 information work is quickly diminishing.
Meaning professionals in historically steady fields might 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 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 risk.
Regards,
Ian King
Chief Strategist, Banyan Hill Publishing
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