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Intelligence is a commodity. Context is the real AI Moat

adlrocha.substack.com

41–50 of 114 posts

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

#41

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?

Sure. “Tell me a joke”

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

#42
post #34

Earlier quoted context omitted.

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…

Another way to look at this is imagine the steps that would be required to get to an AI first society. As you say, humans aren't going to want to lose agency so you'd have to see the decline of democratic governments. At the same time you'd see rise of autocrats concentrating power. Autocrats have no problem killing people, and they'd be motivated to have AI kill people. You'd see information controlling methods take…

AI gonna need good physical embodiment (robots) to actually take control of the world

Fortunately thats further off

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

#43
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…

>- 'Automation will lead to immediate devaluation of human labor that is routine. Society needs to decouple a person's "worth" from their "utility as a tool".' I have this vision that in absence of the ability for people to form social hierarchies on the back of their economic value to society, there will be this AI fueled class hierarchy of people's general social ability. So rather than money determining your neigh…

If we have post scarcity due to AI, everything becomes so uncertain. Why would we still have violent and crazy people? Surely the ASI could figure it out and fix whatever is going on in their brains. It's so fuzzy after that event horizon I have no confidence in any predictions.

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

#44

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…

It's not a commodity due to the simple observation that revenue run rates of frontier labs are growing exponentially and gross margins are still fine. It's easy to just say it is but the narrative violation keeps occurring in reality.

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

#45
post #34

Earlier quoted context omitted.

Another way to look at this is imagine the steps that would be required to get to an AI first society. As you say, humans aren't going to want to lose agency so you'd have to see the decline of democratic governments. At the same time you'd see rise of autocrats concentrating power. Autocrats have no problem killing people, and they'd be motivated to have AI kill people. You'd see information controlling methods take…

AI gonna need good physical embodiment (robots) to actually take control of the world Fortunately thats further off

Further, yes. How much I can't say. Watching how quickly robots are evolving right now is quite something. Every day something pretty cheap is coming out that would have taken millions of dollars and a massive lab full of scientists to create.

Bi-pedal robots, drones, sensing capabilities, interpretive capabilities, all this is proceeding at a never before seen rate.

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

#46
Neither intelligence nor context are what really differentiate the most successful model for programming (Claude Opus 4.6) from slightly 'smarter' competitors (Codex 5.3, Gemini 3.1 Pro).

It's tool use and personality. If models stopped advancing today, we could still reach effective AGI with years of refining harnesses. There is still incredible untapped potential there.

I maintain a benchmark at https://gertlabs.com that competes models against each other in competitive, open-ended games. It's harder to game the benchmark because there's no correct answer (at least none that any of the models have gotten remotely close to) and it requires anticipation of other players' behavior.

One thing I've found is that Codex and Gemini models tend to perform the best at one-shotting problems, but when given a harness and tools to iterate towards a solution, Anthropic models continue improving where Codex and Gemini struggle to use tools they weren't trained on or take the initiative to follow the high level objectives.

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

#47

Earlier quoted context omitted.

Say I suggest something : Play a valid game of chess at club level (elo approx 1200 say) using algebraic notation. Then you’re either going to say it can or you’re going to say that requires more than 10000 tokens. This isn’t an interesting conversation and I don’t think you are presenting this challenge in good faith for the reason I gave above.

https://chessbenchllm.onrender.com There are several models with greater than 1200 elo Also https://dubesor.de/chess/chess-leaderboard

I'll admit that's better than I expected, but these ratings also imply there are plenty of humans who will beat LLMs at chess.

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

#48
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…

>- 'Automation will lead to immediate devaluation of human labor that is routine. Society needs to decouple a person's "worth" from their "utility as a tool".' I have this vision that in absence of the ability for people to form social hierarchies on the back of their economic value to society, there will be this AI fueled class hierarchy of people's general social ability. So rather than money determining your neigh…

[deleted]

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

#49
post #29

The pyramids in the article are missing "energy" and "capital": in the world where intelligence becomes a commodity only those two matter. Capital to buy the hardware and install it, and energy to run it. Models already are a commodity, and "physical is the new king". As a side note, if you believe that because of the agents doing most of the work we will face the problem of what do we do with the all the free time (…

Exactly this. General purpose intelligence and automation allow a clean break between capital and money as we understand it.

Money is used only to pay wages. It has intermediate uses, storage, leverage, etc but at the edge all you can do with money is pay wages. Nobody pays the dirt when you take out the metal, nobody pays the forest for the trees, nobody pays the chickens for the eggs or the cornfields for the crop. Ultimately it’s wages all the way down.

If you don’t have to pay wages, you don’t need money, you just need self replicating automation, energy, and access to land and resources mine or farm the raw materials you need.

If you zoom out to space, it’s essentially grey goo with maybe some humans at the top for a while at least.

Inside the gilded walls, if you want something, you don’t buy it, you build a factory to build it, even if it’s a one off.

If you need money for something because you don’t have enough reach and power yet, you just mine gold or bitcoin.

You don’t build products to sell, you don’t need customers. You just need energy, resources, and the kind of power that comes with 20 million self replicating robots to project your will. You don’t need government, and you certainly won’t be funding it. Government is a really complex system to administer a monopoly of coercive force for the common good. You have your own monopoly of force operating for your good.

The difficult part in the capital flywheel has always been humans in the sticky parts. Take them out and that baby will hummmmm.

Pesky humans outside the gilded walls will be accommodated in the same way we accommodate ants at a construction site.

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

#50

Earlier quoted context omitted.

This is a “no true scotsman” challenge. People are going to say llms can’t do certain things and you are going to say they can. Not very interesting.

Let’s ask in good faith. Can you suggest something that it can’t do? Functional things. I’ll reply in good faith and consider it.

every few months i like to ask chatgpt to do the "thinking" part of my job (scientist) and see how the responses stack up.

at the beginning 2022 it was useless because the output was garbage (hallucinations and fake data).

nowadays its still useless, but for different reasons. it just regurgitates things already known and published and is unable to come up with novel hypotheses and mechanisms and how to test them. which makes sense, for how i understand LLMs operate.

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