Friday, January 10, 2025
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Hi, it’s Chad. Every Friday, I serve as your AI guide to help you navigate a rapidly evolving landscape, discern signals from noise and transform cutting-edge insights into practical leadership wisdom. Here’s what you need to know:
1. Algorithmic Musings: Mind the Gap… OpenAI’s Tale of Two Narratives
Londoners who ride “the Tube” are familiar with the phrase “Mind the gap.” It’s a pithy little British-ism designed to remind riders of the danger of the space (or “gap”) between the train and the platform.
But in AI-land, a different gap appears to be emerging. This gap is the gulf between public messaging and internal challenges… yet you still don’t want to catch your foot in that space. Let’s break this down.
Earlier this week (Monday, 1.06.2025) Open AI CEO Sam Altman published a blog post that included statements like these:
“The last two years have been like a decade at a normal company.”
“We are now confident we know how to build AGI as we have traditionally understood it.”
“We believe that, in 2025, we may see the first AI agents ‘join the workforce’ and materially change the output of companies.”
Coming from tech’s most prominent AI leader, these are bold claims that paint a picture of imminent breakthroughs. One has to wonder whether this optimistic missive had anything to do with an article from two weeks ago: “The Next Great Leap in AI Is Behind Schedule and Crazy Expensive.”
The reality painted by that piece tells a different story. OpenAI’s GPT-5 project (code-named Orion) has faced multiple setbacks, with training runs costing around half a billion dollars each failing to deliver the hoped-for results. Microsoft, OpenAI’s largest investor, had expected to see the new model around mid-2024. Even more concerning, researchers are running into a fundamental problem: there might not be enough high-quality data in the world to make the system as smart as they want it to be.
This isn’t just a minor technical hiccup. It’s a potential paradigm-shifting challenge that questions the entire “more is more” approach that has driven AI development thus far. As former OpenAI Chief Scientist Ilya Sutskever recently put it, “Data is not growing because we have but one internet. You can even go as far as to say that data is the fossil fuel of AI.” Just as we’re discovering the limits of fossil fuels in energy, AI might be hitting the ceiling of what’s possible with existing data.
The timing of Altman’s reflective blog post seems particularly interesting given these challenges. While he speaks confidently about 2025 being the year of AI agents joining the workforce, his company is scrambling to find alternatives to their traditional training methods. They’re hiring people to manually create training data at a painfully slow pace – it would take a thousand people writing 5,000 words daily several months just to produce a billion tokens, a fraction of what GPT-4 was trained on. They’re also experimenting with AI-generated synthetic data and exploring new approaches focused on reasoning rather than raw processing power.
Even these alternative approaches face skepticism. Apple researchers recently found “catastrophic performance drops” in reasoning models when questions included minor, irrelevant details. Meanwhile, OpenAI’s decisions about what constitutes a successful model appear surprisingly subjective – executives decide whether a model is smart enough to be called GPT-5 based largely on what the industry calls “vibes.” And yet…
The competitive landscape isn’t standing still. Anthropic’s latest model is being rated by many as superior to GPT-4, and Google has launched what many consider the most viral new AI application of the year. The exodus of key personnel from OpenAI, including Sutskever and recently Alec Radford, a widely admired researcher who had been with the company for eight years, adds another layer of complexity to the situation.
The contrast between Altman’s public optimism and the reported internal challenges raises important questions about the state of AI development. Are we really on the cusp of AGI and AI agents joining the workforce? Or are we hitting fundamental limitations that might require a complete rethinking of how we approach artificial intelligence? (Full disclosure: I’m personally a techno-optimist who believes that this technology will continue advancing at a rapid pace, though perhaps not quite in the manner that some suggest).
As investors continue to pour money into AI development – with analysts predicting up to $1 trillion in AI projects in the coming years – the stakes couldn’t be higher. OpenAI’s $157 billion valuation is built largely on the promise of GPT-5 representing a “significant leap forward.” But if the current challenges persist, that leap might turn out to be more of a stumble.
Compounding all of these struggles is both a lack of common definition and language regarding “AGI” and “Agents.” This is set against what to many appears to be a perpetual shell game where AI leaders continue to redefine terms and move goal posts as it best suits them. When success criteria are based on “vibes” rather than concrete metrics, how can we truly measure progress?
Perhaps it’s time for everyone in the AI industry to “mind the gap” between promises and reality. What happens when the space between where we are and where we want to be isn’t just a gap to step over, but a chasm that requires us to build an entirely new bridge?
2. Paper Trail: AI Research Decoded
AI and Freelancers: The Inflection Point Analysis
New research reveals how ChatGPT’s impact on freelancer markets follows a predictable pattern, with an inflection point determining whether AI will enhance or replace human workers. Key takeaways include:
- Discovery of occupation-specific AI inflection points determining worker outcomes
- Clear evidence of both displacement and productivity effects across different Online Labor Markets (OLMs)
- Progressive impact patterns are emerging as AI capabilities advance
Read our full analysis of each of these research papers at AI for the C Suite
3. Sound Waves: Podcast Highlights
Catch up on all of our podcast episodes including our most recent discussion with Eric Marshall which dropped this past Monday. Subscribe for free today on your listening platform of choice to ensure you never miss a beat.
New episodes release every two weeks.
4. AI Buzz: Fresh Bytes
Here are two key articles that caught my eye this week.
- AI Will Have a Major Impact on Labor Markets. Here’s How the US Can Prepare.
- Google Unveils Whitepaper on Generative AI Agents
5. Elevate Your Leadership with AI for the C Suite
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As we navigate this unprecedented fusion of human and machine intelligence, remember: the best leaders aren’t just adapting to change – they’re actively shaping it. Until next week, keep pushing boundaries.
Chad