The Price of Intelligence Is Falling Rapidly | Hacker News Reader

The Price of Intelligence Is Falling Rapidly

marginalrevolution.com

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The actual report is by Epoch AI, which is financed by totally independent funds like (Eric) Schmidt Sciences.

Professor Tabarrok uncritically praises the report, which might lead to the conclusion that either human intelligence or moral standards are "falling rapidly".

What? The report is about ai performance and cost.

What possible ideological message could that blog post be pushing?

Its run by a secret cabal that wants to push AI to the masses and cash from IPO before the bubble pops

like every economic bubble, once you've bought in, you either hype it up to make it worthwhile or you are delusional enough to think there's a next level.

With the current regime, there might be a next level, but not at all an enjoyable one.

The next level, is to disassemble the bridge that got them here, to build with the materials the next span on the bridge over the mess and out of responsibility that was promised. There are levels of invested- from "I personally go bankrupt" to "societal collapse because we bet it all on red"..

I guess we're talking about p(doom) for humans; in that having stood by if not actively engaged in the currnet oil crisis and allowed several nation states to commit genocide and active war. These might not be direct causes but attention is finite, they're indirectly buying politicians to not solve these problems.

I mean, this is more or less true of Marginal Revolution for over a decade now...

Price of human intelligence is also falling rapidly. I suspect looking pretty is going to go up in value more rapidly.

Talking pretty, too -- which takes some intelligence, but not too much. The era of the awkward nerd is over. The world is returning to its natural order, with the slimy salesman in the lead.

Price of human intelligence is going up actually, because there's ever-decreasing amount of it, and we've invented a cheap substitute that makes people even stupider.

Can you prove to me that the price of human intelligence is going up? At best it is as it always has been, intelligence in some fields is going up.

It's generally true that the rarer something is the more valuable that is, but only if there are enough potential buyers of the thing that can recognize it. If there is an ever-decreasing amount of intelligence there is probably an ever-increasing amount of stupidity - so will the stupid be smart enough to reward the intelligent with high paid positions?

What I suppose is actually that human intelligence will become more monetizable, by allowing those with it to better take advantage of their unrecognizable ability. But only if the interlocking systems of humanity do not fall apart and destroy the world due to there not being enough intelligent people left to make things work, as per various works of science fiction on the subject.

Group think is highly unlikely to provide new discoveries.

Well, I mean, neither is non-group think.

That's the issue. No one can really systematize "discovery".

How many "group thinkers", "creatives", "non-group thinkers", "nihilists", "anarchists", "contemplatives" in the last - say, 500 years, 5000 years, whatever - have been occasioned by the fall of an Apple? Or the fall of a branch? Or a leaf? Or what have you?

Why did it spark a new flame in the mind of Newton? Science can't explain. If we could, we'd teach everyone to be that sort of contemplative.

In schools there are massive changes. I was told that kids are more relaxed and care less about education and that the value of the smart kids, the know it all kids, is going down as more students can access Ai and they are not as helpless as they were when failing to tune in while in the class. The dynamics are changing and students are less suicidal too apparently because the pressure to deliver scholastically is going down because no one knows what the future holds and what will be valued.

I'd expect this to be temporary while the educational system figures out how to manage LLM-bolstered students.

The intern I worked with last year said her graduating class all felt like they were the last "real" graduates. Meaning: the class after her had less credibility in her eyes, having been presumed to have used AI to get past the "pons asinorum"/"bridge of asses".

That depends if there's still a demand for educated people. Doesn't matter how good they are for society - only how much demand there is. If there's no demand, the schools have no reason to change.

We'll call ourselves "Eloi"[1], I guess?

On the one hand, one really can't remove all of humanity from the economy. Humans are what makes the economy matter, and if you cut them all out, they'll just replace the economy with something else, call it "the economy", and move on. ("Butlerian Jihad" pivot, I suppose.)

On the other hand... I'm reminded of dock workers and the advent of container ships. The only way to handle that was to basically pay those workers a living wage for the rest of their lives to ... not work.

So... we have options, I guess!

  [1] In Orson Welles's Time Machine, the eloi were the lazy "child-like" humans not challenged to grow intellectually.

In my career I've worked with people with PHDs in Physics. People with advanced degrees in fluid dynamics and turbine engineering, people with chemistry and ChemE degrees, postdocs in Geology.

All were working alongside me, a self-taught programmer making websites.

I've long thought that there's an oversupply of smart people in the world but for the field of software development, which was hiding that fact by soaking all of them up.

If SDE is collapsing as a field, a whole bunch of people who thought their intelligence and credentials guaranteed them a comfortable life are in for a shock.

This is really looking at the problem from the wrong angle. It’s not that we don’t need all those degrees. The problem is that tech companies are making so much money that it makes other industries practically irrelevant when it comes to return on investment. It has thrown the economy completely off balance.

Strongly agree. Perhaps an economy shouldn’t be organized around money.

How would you propose an economy not be organized around money? Any examples you could think of that have worked well? I would also ask that in doing so if you can consider how these changes would work with today's nation states and the scale of 8 billion people or so too.

I find answers to this question meet idealogical hand waving more than concrete action plans or examples of success. YMMV

What will happen is not about what people prefer to happen or not. China grew rapidly too and the west is fearful of their success and that is why Americans are ramping up their Ai and drones and all that believing that spending money will deliver supremacy. There are/were many paths to success traditionally speaking and somethings will work and somethings wont. It is not a decision based phenomena. Its an outcome based on zillions of variables. Whether money will win or not and that everyone will benefit via AI is matter of conjecture.. Who knows.. Place your bets!!

I’m not sure people in the west are scared of China. I think it’s more so about the method in which they grew their economy. The downside for China’s model is the west can simply not buy their products except where required so there’s nothing to really be scared of.

What’s to be scared of anyway? Isn’t China a peaceful nation that abides by international law?

Absolutely not.

The PRC has land claims against almost every bordering country, which are many in number. It does wolf warrior diplomacy, surreptitiously moves border posts, and so on.

It also pretends to abide by international treaties but when a ruling against their absurd claims in the South China Sea were refuted, they rejected the ruling.

In the age of AI it uses from the same playbook as Russia to sow discontent and create internal conflict within countries in Asia.

It captures and kills dissidents abroad.

Let's start with the basics. Let's ban unlimited money from politics first (ban SuperPacs and return to 90s era political rules).

If rich people want to influence politicians, there should be hard caps on money and advertising.

There's nothing wrong in saying too much money is now destroying too much of the good parts of our country. Starting one step at a time is better than trying to build a massive reform that goes no where.

Once money in politics calms down, the next steps should become more obvious as the noise from the Billionaires no longer drown out our attention.

Regardless of what answers there are to an alternative (there are many, with both flaws and benefits that could work better or could be worse in practice), the question “how would it work at scale” is probably impossible to answer thinking in the framework of what currently exists. The people who benefit from the existing systems would make it impossible for anything else without disrupting power, which, if you view an economy built around profit as something that could not be sustainable into the far future, could be necessary.

This comment isn’t trying to be biased any specific way, just trying to be realistic while also saying alternatives exist but would likely be disruptive for better or for worse.

Perhaps you meant "financialization" instead of "money", b/c money is literally what makes up an economy.

No, labour and resources are what makes up an economy. The money is "only" the primary mediator

You can have billions in nominal units but it is inflated to worthlessness when resources or labour disappear

> The money is "only" the primary mediator

I have nothing to say to this sort of disingenuous characterization.

economy != money, economies have existed before markets have existed

I was talking to the turbine engineer at lunch one day and the way he put it is this:

There are about five companies who hire people with his background. They all go through boom and bust cycles together. When he graduated they were in a bust cycle and nobody was hiring new graduates, so he found a job in software. He was glad because the pay and working conditions are better, and at the time (a few years ago) it seemed like software engineering was a safe career with lots of employers, which turbine engineering was not.

https://en.wikipedia.org/wiki/Dutch_disease

Really interesting link, thanks!

> If SDE is collapsing as a field, a whole bunch of people who thought their intelligence and credentials guaranteed them a comfortable life are in for a shock.

Even if we accept your precondition as true, that SWEs contain multitudes of smart people who will jump to other industries, I don't think the conclusion holds.

In the US at least, SWEs are among the most entrepreneurial industry members. They'll bring that attitude to whatever their new industry is. I think there will be an explosion of new startups in different areas, and we'll Jevons Paradox our way forwards.

I guess we're going to have a bunch of people innovating on jet turbines in their garages?

South Korea would be an interesting point of comparison. High IQs, after-school tutoring, 70% of young people get degrees: result is a college wage premium of only 31% vs 54% average in the OECD

https://www.oecd.org/en/publications/education-at-a-glance-2...

I would rather have SpongeBob making my burger patties than squidword. More intelligence is better than less intelligence.

You don’t have to look pretty to become an oligarch these days. Have you seen those guys?

Have you seen their wives with lip and cheek injections lately? I am not saying that they are pretty by old standards; to each their own.. it is a new standard of beauty in the age of Ai I suppose; mass transformation of beauty standards is a thing..

I frequently have speculative conversations about what (good-leaning) post-AGI societies might look like.

When asked about how one might attain social mobility in such a society, where the intrinsic value of our intelligence and ability to do labor is gone, I unironically respond with "be hot".

some people think that's how humans got so intelligent. actually if you think about it, it's the only way humans could have got so intelligent. brains were our tail feathers for a while.

If human intelligence stops being the trait that propels one up the socioeconomic ladder, it will not be good looks that takes its place. The ability to project physical force will become currency. This is why AI could cause civilized societies to completely unwind.

We will have the robots that will beat them up; LOL.. My robot will know the Brazilian Jiu-Jitsu and will beat up their robot!

> Price of human intelligence is also falling rapidly.

Where?

What's your definition of "rapidly"?

I could see an argument for price of human intelligence going down - we're essentially in a global stagflation - which feels like a recession (sometimes moreso) even if it isn't technically one...

Rapidly? I think we have different definitions, or you're only looking in a niche.

I'd also argue that global stagflation doesn't yet have anything to do with AI. My crystal ball doesn't work. Things could change quickly. But I don't see any evidence now.

High priced intelligence is currently the doctors, engineers, professors, scientists, analysts, bankers, technical staff.. etc. Many are already replaceable with AI and many others sooner or later you know. In my opinion that is.

I love marginal revolution. But I'm not fond of the unit stated. I dont believe we're buying intelligence. I'm sure marketing will run with it though.

I have been searching for a good term or name for what we are actually buying. A "probabilistic search for a reasoning chain through a semantic space" is about as close as I've gotten and I have a feeling it's not exactly accurate either.

"Plausibility"

Yes, the price of inference is falling rapidly.

What about the cost? Inference looks like a viable business model for those operators that have access to SOTA model and serving infrastructure, but the investment required to have it is enormous, and appears to be never-ending, because if an operator stops investing aggressively, its model and serving infrastructure quickly become non-competitive, and customers will quickly leave for alternatives.

I went from 408 euros/month of AI spending to 28 in the span of one year.

The 20 euros GPT plan with GPT 6 Luna (and Astra for doing the tough stuff) and OpenCode Go (8 euros) offer me both way more intelligence and tokens than spending 400 euros just at the beginning of the this summer did.

Today I worked two hours with GPT 6 Luna, have been very productive tackling some hard stuff and...my weekly usage went from 57% to 56%?

You really don't need to use the strongest model for everything. And even chinese open models are effectively few months old sota. You can use mimo 2.6 or DS 4.1 flash on 8 $/months OpenCode and barely ever have to worry about consumption.

Thank you. Yes, the price of service is falling rapidly. I agree.

What I don't know, and was asking about, is whether the cost of providing that service is also falling rapidly, including the cost of training.

The cost is absolutely falling, API pricing is not subsidized, and you can easily test the performance per dollar you can get today vs a year ago.

I’d happily take Opus 4.8 xhigh at a reliable 10k tokens per second over oversubscribed SOTA models.

At some point this will probably happen, but we’re not quite there yet.

Well, since llms need matterial for self-education, someone still had to be inteligent enough. Or llms will freeze their “intelect” at some point.

Well, someone. But not necessarily anyone else.

This is the key.

In the age of AI, human super-intelligence, is extremely valuable. But yeah, just being intelligent? Not so much.

Just to illustrate, many have complained that big AI labs "buy" startups only because they want to acqui-hire the Stanford/CalTech/MIT PhDs who started it. Then they pretty much $#!t-can the rest of the people who were, to be fair, mostly just run of the mill UTexas/Umichigan/UofwhateverState TF/PyTorch monkeys. But the point is that in the old days, the second tier guys would have made out like bandits as well.

I think that was, kind of, the start of human intelligence becoming a winner take all game. The AI's only need to learn the latest and greatest from one person before they can leverage that value everywhere. And business is not likely to care too much about who that person is. They will care even less about the people who are not that person.

Why would it freeze if they can create more training material. Its already been shown synthetic training data is just as good if not better.

> Its already been shown synthetic training data is just as good if not better.

Source, please! I'm a machine learning layperson but how can this not be overfitting?

For example, an LLM can prove a new theorem in math, verify it in Lean (so it is definitely true), and then prove more things based on that.

AI-generated data might not always be that useful, but at least in this case it obviously is.

https://arxiv.org/html/2609.26457v1

> AIDE demonstrates that recursive self-improvement at the harness layer can produce transferable gains in an AI research agent’s research efficiency. During the recursive self-improvement run, the loop accepted seven rewrites, each under a fixed evaluation budget (section 3.2). Under this fixed evaluation budget, gains in optimization capability on AI R&D tasks translate to gains in research efficiency."

https://arxiv.org/abs/2609.11873

> The Last AI Built by Humans: Toward Genuine Recursive Self-Improvement

Surprisingly, this isn't necessarily true.

To take an intuition: there are lots of problems that are easier to pose and to check than they are to solve, in mathematics.

No, they can just solve tasks verifiably. Reinforcement learning from verifiable rewards. Pure next-token supervision is only in the pre-training phase for modern LLM agents. They can also define new RL environments and pose new challenges to themselves and train themselves to solve them faster. Yes, at some point some human steering and judgment comes in as to what sorts of tasks to train towards. But there is no obvious taper-off at human level.

> Well, since llms need matterial for self-education, someone still had to be inteligent enough.

Not necessarily. https://arxiv.org/html/2609.26457v1

Cost per token goes down yes. But are you using more tokens per task/ prompt/ project?

Jeaveons paradox. The cheaper and better something becomes the more of it you use.

But in general on tasks with a finite number of steps to a clear goal you use less tokens.

Absolute BS, my experience is people are using this "intelligence" to do more dumb shit. I'm not seeing intelligence, I'm seeing unqualified people wielding power tools but they don't know any basic carpentry skills.

Spot on. We are automating what has never needed to be done anyway, bullshit jobs or mostly bullshit. Helpdesk, client hotline, analytics dashboards, reports ? What if we tried to make things work on first time and always so that there is no need for a helpdesk. If you produce something of clear value you don't need analytic dashboards or reports. I do not know if AI is the end of capitalism and bureaucracy or the final nail in the coffin for them to eat the world.

No one said anything about using the intelligence wisely. I have always maintained that you need intelligence to reach the highest level of stupidity.

It may be true for text outputs, but it's absolutely untrue for other modalities: image, speech, voice, and embedding. Heck, embedding models haven't even been updated in years.

The price of wisdom is unchanged, however

Why does electricity stop at 1973? It's been going back up again for the last few years.

When intelligence is seen as a means to an end, rather than the lifeblood of your own perception, it makes sense the "price" goes down. What's being bought is, after all, artificial intelligence.

The price of intelligence is the same. What's being lowered is the standard of living.

>artificial intelligence

I disagree, there is no such thing as artificial intelligence, there is only intelligence.

>When intelligence is seen as a means to an end

Because it is also a means to an end regardless of whatever else it can do. It is a dimension in the problem space of survival.

We as humans are now feeling pressure on our intelligence, whereas us humans have been putting a shitload of pressure on just about every other intelligent creature for the last 100,000 years.

Oh well, if you feel that way you have nothing to worry about. Nothing is being lost here but opportunities. :-)

These ML/LLM/AI are systems where no one will ever be accountable for and guarantee its stability, safety, and its value.

ML/LLM/AI may be useful, but it must always be considered unauthorized, mistrust, experimental, unverified, always probable to fail on each iteration. Its data must always be accountably supervized by an alive human, who realizes responsibility, life, pain, art, effort, love... Always, even at 2999+ years/times. No life/pain/art/love is no sense/trust/confidence/respect/safety.

That is, it may be fun to play with as a toy, as any ML/LLM/AI based system, where no trust exist but only probability, entropy, chance, luck... but nothing serious, time-rewarding, or humane enough to appreciate and love it in the long run.

An actual Developer is someone who prioritizes thinking and solution finding relying on something deterministic and accountable.

All systems based on LLM, ML, or anything that is algorithmically based on feedback system, learning, training, is indeterministic, and hence, always inaccurate, unreliable, and irresponsible systems, by design.

The process of art-working, coding, programming, development, solution finding... that feel of an achievement. This is what I understand, too. There's no achievement in anything AI-driven - it based on luck/moment/probability/chance.

"Oh My God! Please, all Gods, make this AI output the finally correct code! Please!"

Fudge it.

And you also pay for it. You pay and depend on it, on the the luck, for the chance, for the probability someone controls for you over an API or algorithm you don't even know or cannot verify due its "self-training" design, or it being close-sourced.

> ...you're gatekeeping programming... you are not seeing the big picture... you are missing opportunities...

No, sorry, never. I do not agree with that. These "responses" are coming from infants, immature, children, I believe, sorry... from those who could not care less about the development, responsibility, the overall process of the life of us, people, to find solutions, to reach the goals, to treasure achievements, to write our history with actual names of people on papers sign on papers by hand... for what will leave after us, with art, statues, quotes... in the infinite history of the ineffably magnificent world...

Your name should be in the code you write alone or with a team, your commits, solutions. Your work must be acknowledged and kept in the history. You should be always a respectable alive artist, who is responsible for their work. Our history must evolve, be preserved, respected, appreciated, and shine with glory of our achievements with human names in it for the incredibly marvelous future of opportunities, discoveries, love, and purely magnificent marvel.

There's whole space out there, still, and we must add and keep human names in the history cherished.

> Machines should work. People should think. ~ IBM

> This is one reason the open-model threat is not as large as it appears: frontier models don’t merely outperform older models; they are rapidly becoming cheaper to run at any given level of performance.

This really misses the point. The “threat” (to the profits of big AI companies) is that competition will drive prices down in a race to the bottom. It doesn’t really “help” (drive the profits for big AI companies) if that competition comes from open-ish models or from competing big AI companies or anywhere else.

This makes looksmaxxing even more important, according to my agent's opinion

This is really what the property owning class wants- they know they are not that smart and they have always paid other people to be smart for them, but the fact that the time of smart, educated people is expensive has always galled them.

As another commenter said, many of us have viewed our intelligence as a key part of our personhood and how we perceive and interact with the world. But capitalism has found a way to convert that, too, into a purchaseable commodity.

If intelligence is now meaningless and being perceptive is worthless, all that remains is the ugliness of stupid power.

> If intelligence is now meaningless and being perceptive is worthless, all that remains is the ugliness of stupid power.

I don't disagree that there are some truly awful people in power in certain places right now, but this statement is ridiculous. Many intelligent and perceptive people are very cruel or foolish.

  > all that remains is the ugliness of stupid power

in the end, in the world of business and politics hasn't it always been these types of people that eventually float to the top? capital/power begets more capital/power...

A race to the bottom on price will be very good for profits!

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