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 stage of intelligence that beforehand required a a lot larger mannequin. Inference is getting cheaper. GPUs are getting quicker. And also you’ve acquired all of those traits 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 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 baby’s play.
In actual fact, if you happen to in contrast the 2, you’d be shocked at how significantly better the GPT-4.o mini mannequin is at this time. It causes higher, offers extra correct responses and hallucinates far lower than GPT-3.
But, GPT-3 price 100X what GPT-4.o mini prices to run at this time. Which means AI isn’t simply beating Moore’s Regulation, it’s blowing it away.
This implies we might be nearer to Synthetic Common Intelligence (AGI) ahead of 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 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 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. In actual fact, analysis means that we’ve been constantly 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 might be a system way more clever than us by the top of subsequent 12 months.
If the present forecast is well-tuned, we’re 2030.
Take note, this analysis was revealed even earlier than intelligence prices fell dramatically. And in addition method earlier than DeepSeek modified the calculus on what is feasible.
I consider 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 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 referred to as the Flynn Impact, and it was thought to outcome from elements like higher training, improved vitamin 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 happening.
A research revealed 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.
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 People have gotten much less clever.
There are numerous legitimate the explanation why our collective IQ might be dropping in these areas.
It might mirror adjustments in how individuals have interaction with data or carry out on particular varieties of assessments.
I’d wager that adjustments in training high quality and emphasis on sure expertise over others within the classroom performs an element too.
Even adjustments in perceived societal values would possibly have an effect on check efficiency. Heck, individuals simply won’t be motivated to carry out effectively on these assessments anymore.
However whereas all these elements are possible 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 workers. Not its baristas. The corporate’s white-collar employees.
It was the most recent addition to a troubling pattern…
Unemployment for college-educated employees is rising quicker than for different teams, and their wage development can be lagging.
The large 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
After all, among the newer job losses are as a result of Trump administration’s price range cuts at federal companies and analysis establishments.
Johns Hopkins College, which depends upon federal funding, introduced 2,000 layoffs this month alone.
However many consultants consider we’re witnessing a “significant transition in the best way work is completed,” as Carl Tannenbaum, the chief economist at Northern Belief lately 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 Alternative 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 minimize jobs for 16 straight quarters, with its house 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 tasks throughout coding, advertising and marketing and different fields — is gaining traction. Firms like Starbucks and Nissan cite comparable effectivity targets of their latest layoffs.
However I consider that the plummeting price of intelligence can be an enormous issue right here.
As I famous on the prime, 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 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 research discovered that AI-assisted software program builders boosted productiveness by greater than 25%, with the largest positive aspects amongst junior coders.
That is virtually sure to erode the wage premium for knowledgeable builders. It is going to 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 had been in excessive demand. Many individuals thought coding was one thing that solely very smart individuals had been capable of 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’ll be able to inform, I’m having a little bit of an existential disaster about intelligence.
The optimist in me appears to be like 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, it appears that evidently the worth of human intelligence in routine information work is quickly diminishing.
Which means 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 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 principles of the sport are altering.
And as AI continues to evolve, the financial worth of human intelligence could also be beneath menace.
Regards,
Ian King
Chief Strategist, Banyan Hill Publishing
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