The potential for AI advancement may be slowing down due to the limitations of intelligence.

In recent weeks, Silicon Valley has become increasingly concerned that the advancements in generative artificial intelligence are slowing down, despite the rapid progress made in the past two years.

The biggest players in the space are experiencing a lack of progress in their models' quality. OpenAI's next model GPT-5 is facing a smaller boost in quality, while Anthropic has delayed the release of its most powerful model Opus. Bloomberg reports that an upcoming version of Gemini is not meeting internal expectations at tech giant.

"Dan Niles, founder of Niles Investment Management, stated that ChatGPT was launched in late 2022, which means it has been nearly two years since its release. Initially, there was a significant increase in the capabilities of these new models. However, now that the models have been trained, the performance improvements are gradually leveling off."

Recent developments suggest that the assumption that scaling laws in Silicon Valley are a religion may not be entirely accurate. The belief that adding more computing power and data will always result in better models may not hold true.

Experts claim that the key issue with AI companies is that they are facing a "data wall" as they run out of data for training models. To solve this problem, they are turning to synthetic data, or data generated by AI. However, Scale AI founder Alexandr Wang believes that this is only a temporary solution.

""If you feed AI models with a lot of nonsense, they will only produce more nonsense," Wang stated."

Some industry leaders are challenging the notion that the pace of progress is slowing down.

"Nvidia CEO Jensen Huang stated on the company's latest earnings call that the foundation model pre-training scaling is still intact and continues. He emphasized that this is an empirical law, not a fundamental physical law, but the evidence suggests that it continues to scale."

"There is no wall," as stated by OpenAI CEO Sam Altman on X.

Google has made significant progress in Gemini and has observed improvements in capabilities such as reasoning and coding. OpenAI and Anthropic did not respond to requests for comment.

The next phase of the race is to find consumer applications that can be built on top of existing technology without the need for further model improvements. The development and deployment of AI agents is expected to be a game-changer.

In a recent podcast interview, CEO Mark Zuckerberg predicted that the world will eventually have more AI agents than people.

Watch the video to learn more.