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Intelligence is a commodity. Context is the real AI Moat

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Re: Intelligence is a commodity. Context is the real AI Moat

#11

Post by philipwhiuk »

> But the topic of conversation that I enjoyed the most was when someone raised the question of “what would be the role of humans in an AI-first society”. Some were skeptical about whether we are ever going to reach an AI-first society. If we understand as an AI-first society, one where the fabric of the economy and society is automated through agents interacting with each other without human interaction, I think that unless there is a catastrophic event that slows the current pace of progress, we may reach a flavor of this reality in the next decade or two.

I don't really know how you can make this prediction and be taken seriously to be honest.

Either you think it's the natural result of the current LLM products, in which case a decade looks way too long.

Or you think it requires a leap of design in which case it's kind of an unknown when we get to that point and '10 to 20 years' is probably just drawn from the same timeframe as the 'fusion as a viable source of electricity' predictions - i.e. vague guesswork.

Re: Intelligence is a commodity. Context is the real AI Moat

#12

Post by 7777777phil »

apsurd wrote: post #4
7777777phil wrote: post #2

API prices dropped 97% in two years so the model layer is already a commodity. The question is which context layer actually sticks. The OpenClaw example in the article (400K lines to 4K) is a nice proof point for what happens when context replaces code. I've been arguing for some time now that it's the "organizational world model," the accumulated process knowledge unique to each company that's genuinely hard to repl…

From your link: > Closing that gap, building systems that capture and encode process knowledge rather than just decision records, is the highest-value problem in enterprise AI right now. I buy this. What exactly is the export artifact that encodes this built up context? Is it the entire LLM conversation log. My casual understanding of MCP is service/agent to agent "just in time" context which is different from "world…

The MCP point is right, though tbh MCP is more like plumbing than memory. Execution-time context for tools and resources. The world model is a different thing entirely, it needs to persist across sessions, accumulate, actually be queryable.

In practice it's mostly RAG over structured artifacts. Process docs, decision logs, annotated code and so on. Conversation history works better than you'd expect as a starting point but gets noisy fast and I haven't seen a clean pruning strategy anywhere...

On the format question imo nobody really knows yet. Probably ends up as some kind of knowledge graph with typed nodes that MCP servers expose or so, but I haven't seen anyone build that cleanly. Most places are still doing RAG over PDFs so. That tells you where the friction is.

Re: Intelligence is a commodity. Context is the real AI Moat

#13

Post by steveBK123 »

philipwhiuk wrote: post #11

> But the topic of conversation that I enjoyed the most was when someone raised the question of “what would be the role of humans in an AI-first society”. Some were skeptical about whether we are ever going to reach an AI-first society. If we understand as an AI-first society, one where the fabric of the economy and society is automated through agents interacting with each other without human interaction, I think tha…

Right, if thought of as a tool for automation then AI is going to add productivity/efficiency gains, disrupt industries, cause some labor upheaval, etc.

If someone is proposing that an "AI first" society is inevitable, I'd ask if they think we live in a "computer first" or "machine first" society today?

If its so existential and society-altering as "AI first society" implies, then we'd more likely have the Dune timeline here as humans have agency and stuff happens. At some point those in control take so disproportionately that societal upheaval pushes back.

Re: Intelligence is a commodity. Context is the real AI Moat

#15

Post by badgersnake »

simianwords wrote: post #14

I have my own challenge: I think LLMs can do everything that a human can do and typically way better if the context required for the problem can fit in 10,000 tokens. For now this challenge is text only. Can we think of anything that LLMs can’t do?

* code

* write interesting prose

* generate realistic images

Re: Intelligence is a commodity. Context is the real AI Moat

#16

Post by 9wzYQbTYsAIc »

jfalcon wrote: post #7

>someone raised the question of “what would be the role of humans in an AI-first society”. Norbert Wiener, considered to be the father of Cybernetics, wrote a book back in the 1950's entitled "The Human Use of Human Beings" that brings up these questions in the early days of digital electronics and control systems. In it, he brings up things like: - 'Robots enslaving humans for doing jobs better suited by robots due…

Seems like a good time to enshrine human rights and the social safety net by ratifying the ICESCR (https://en.wikipedia.org/wiki/International_Covenant_on_Econ...) and giving human rights the teeth they need.

I used Anthropic to analyze the situation, it did halfway decent:

https://unratified.org/why/

https://news.ycombinator.com/item?id=47263664

Re: Intelligence is a commodity. Context is the real AI Moat

#17

Post by simianwords »

badgersnake wrote: post #15
simianwords wrote: post #14

I have my own challenge: I think LLMs can do everything that a human can do and typically way better if the context required for the problem can fit in 10,000 tokens. For now this challenge is text only. Can we think of anything that LLMs can’t do?

* code * write interesting prose * generate realistic images

It can do all of them. I also said text only.

Re: Intelligence is a commodity. Context is the real AI Moat

#18

Post by 9wzYQbTYsAIc »

steveBK123 wrote: post #13
philipwhiuk wrote: post #11

> But the topic of conversation that I enjoyed the most was when someone raised the question of “what would be the role of humans in an AI-first society”. Some were skeptical about whether we are ever going to reach an AI-first society. If we understand as an AI-first society, one where the fabric of the economy and society is automated through agents interacting with each other without human interaction, I think tha…

Right, if thought of as a tool for automation then AI is going to add productivity/efficiency gains, disrupt industries, cause some labor upheaval, etc. If someone is proposing that an "AI first" society is inevitable, I'd ask if they think we live in a "computer first" or "machine first" society today? If its so existential and society-altering as "AI first society" implies, then we'd more likely have the Dune timel…

Seems like a good time to enshrine human rights and the social safety net by ratifying the ICESCR (https://en.wikipedia.org/wiki/International_Covenant_on_Econ...) and giving human rights the teeth they need.

I used Anthropic to analyze the situation, it did halfway decent:

https://unratified.org/why/

https://news.ycombinator.com/item?id=47263664

Re: Intelligence is a commodity. Context is the real AI Moat

#20

Post by steveBK123 »

7777777phil wrote: post #2

API prices dropped 97% in two years so the model layer is already a commodity. The question is which context layer actually sticks. The OpenClaw example in the article (400K lines to 4K) is a nice proof point for what happens when context replaces code. I've been arguing for some time now that it's the "organizational world model," the accumulated process knowledge unique to each company that's genuinely hard to repl…

The way many corporates are using the models nearly interchangeably as relative quality/value changes release to release, AND the API price drops do make me question what the model moat even is.

If LLMs are going to make intelligence a commodity in some sense, where does the value end up accruing will be the question. Picks/shovels companies and all the end user case products being delivered? Mainframes value didn't primarily accrue to DEC. PCs value didn't really accrue to IBM. Internets value didn't accrue to Netscape. Mobiles value didn't only accrue to Apple.

One reminder that new efficiency / greatly lowered costs sometimes doesn't replace work (or at least not 1-1) but simply makes things that were never economical possible. Example you hear about AI agents that will basically behave like a personal assistant. 99% of the rich world cannot afford a human personal assistant today, but I guess if it was a service as part of their Apple Intelligence / Google something / Office365 subscription they'd use it.

We seem to be continually creating new types of jobs. Only a few generations ago, 75% of people worked on farms. Farm jobs still exist you just don't need so many people.

The type of work my father and grandfather did still exist. My father's job didn't really exist in his father's time. The work I do did not exist as options during their careers. The next generation will be doing some other type of work for some other type of company that hasn't been imagined yet.

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