I would say compression and intelligence are closely related, not equal. For example, zstd is a pretty good compressor, but does any one think it should be called a pretty good “AI”?
Zstd, while it might be better than gzip or bzip, is still a very poor compressor compared to an ideal compressor (which hasn't yet been discovered).
That is why zstd acts like a rather bad AI. Note that if you wanted to use zstd as an AI, you would patch out of the source code checksum checks, and you would then feed it a file to decompress (The cat sat on the mat), followed by a few bytes of random noise.
A great compressor would output: The cat sat on the mat. It was comfortable, so he then lay down to sleep.
A medium compressor would output: The cat sat on the mat. bat cat cat mat sat bat.
A terrible compressor would output: The cat sat on the mat. D7s"/r %we
See how each is using knowledge at different levels to generate a completion. Notice also how that few bytes generates different amounts of output depending on the compressors level of world understanding, and therefore compression ratio.
LLMs are sort of unable to do this because they use a fixed tokenizer instead of raw bytes. That means they won't output binary garbage even early on + saves a lot of memory, but it may hurt learning things like capitalization, rhyming, etc we think are obvious.