Slowdown for AI is opportuniol for everyone else

Businesses will benefit from some much-needed breathing space to figure out how to deliver that all-important return on investment.

- Parmy Olson

The multitrillion-dollar artificial intelligence (AI) boom was built on certainty that generative models would keep getting exponentially better. Spoiler alert: They aren't.

In simple terms, "scaling laws" said that if you threw more data and computing power at an AI model, its capabilities would continuously grow. But a recent flurry of press reports suggests that's no longer the case, and AI's leading developers are finding their models aren't improving as dramatically as they used to.

Open AI's Orion isn't that much better at coding than the company's last flagship model, GPT-4, according to Bloomberg News, while Alphabet's Google is seeing only incremental improvements to its Gemini software. Anthropic, a major rival to both companies, has fallen behind on the release of its long-awaited Claude model.

Executives at 0pen AI, Anthropic and Google all told me without hesitation in recent months that AI development was not plateauing. But they would say that. The truth is that long-held fears of diminishing returns for generative AI, predicted even by Mr Bill Gates, are becoming real. Dr Ilya Sutskever, an AI icon who popularised the bigger-is-better approach to building large language models, recently told Reuters that it had levelled off. "The 2010s were the age of scaling," he said. "Now we're back in the age of wonder and discovery once again."