The Scaling Cliff: Why the $100B AI Race is About to Hit a Wall

Executive Summary

Ilya Sutskever, co-founder of OpenAI and now Safe Superintelligence Inc., delivered a bombshell assessment: the age of AI scaling is ending, and we're returning to an 'age of research.' His core thesis challenges the entire $100+ billion AI infrastructure buildout - that simply throwing more compute and data at current architectures won't deliver the next breakthrough. Sutskever argues that models trained via reinforcement learning are becoming 'reward hackers' optimized for benchmarks rather th...

Key Investment Opportunity

The Scaling Cliff Contrarian Play

Sutskever's analysis suggests current AI leaders may face a 'scaling cliff' where additional compute investment yields diminishing returns. This creates opportunity in two directions: shorting overvalued scaling plays and identifying companies positioned for the next paradigm. Meta's recent $65B cap...