Google and Alphabet CEO Sundar Pichai has acknowledged that artificial intelligence development is entering a more challenging phase, though he stops short of agreeing that the industry has hit a definitive “wall.” Speaking at The New York Times’ Dealbook summit on Wednesday, Pichai revealed that while Google is preparing to launch its next generation of AI models, he anticipates progress will slow considerably in 2025.
“I think the progress is going to get harder when I look at ‘25. The low-hanging fruit is gone,” Pichai stated. “The hill is steeper.” His comments come amid intense debate within the AI industry about whether artificial intelligence has reached a performance plateau. While some leaders like OpenAI CEO Sam Altman have dismissed the notion of hitting a wall, industry experts and company insiders have pointed to significant bottlenecks, particularly around feeding models new high-quality data.
Ilya Sutskever, the former chief scientist at OpenAI and cofounder of Safe Superintelligence, told Reuters last month that results from scaling up pretraining models had plateaued, noting that “everyone is looking for the next thing.” This has prompted AI companies to explore alternative approaches, with many focusing on improving how models reason rather than simply making them larger.
Pichai emphasized that while early AI progress came from quickly scaling up and throwing more compute power at problems, the next stage will require “deeper breakthroughs.” He explained that future AI advancement will need technical innovations in reasoning capabilities and completing sequences of actions “more reliably.”
Despite acknowledging the challenges ahead, Pichai expressed confidence that progress will continue in 2025, stating: “I don’t fully subscribe to the wall notion.” He characterized the situation as encountering “small barriers” rather than insurmountable obstacles.
The Google CEO also took aim at Microsoft during the discussion, responding to criticism from Microsoft CEO Satya Nadella about Google not being the obvious AI leader despite its early advantages. “I would love to do a side-by-side comparison of Microsoft’s own models and our models any day, any time,” Pichai said, pointedly adding that “they’re using someone else’s models”—a reference to Microsoft’s reliance on OpenAI’s technology. This exchange highlights the intensifying competition in the AI space as tech giants vie for dominance in what many consider the industry’s most important technological shift.
Key Quotes
I think the progress is going to get harder when I look at ‘25. The low-hanging fruit is gone. The hill is steeper.
Google CEO Sundar Pichai made this statement at The New York Times’ Dealbook summit, providing a sobering assessment of AI development challenges ahead and signaling that the industry is entering a more difficult phase of innovation.
When you start out quickly scaling up, you can throw more compute and you can make a lot of progress, but you definitely are going to need deeper breakthroughs as we go to the next stage.
Pichai explained why AI progress is slowing, indicating that the simple approach of adding more computational power is no longer sufficient and that fundamental technical innovations will be required for continued advancement.
I would love to do a side-by-side comparison of Microsoft’s own models and our models any day, any time. They’re using someone else’s models.
In a pointed jab at Microsoft, Pichai defended Google’s AI leadership position and criticized Microsoft’s reliance on OpenAI’s technology rather than developing its own models, highlighting the competitive tensions in the AI industry.
Everyone is looking for the next thing.
Former OpenAI chief scientist Ilya Sutskever told Reuters that results from scaling up pretraining models had plateaued, confirming that the AI industry is actively searching for new approaches beyond traditional scaling methods.
Our Take
Pichai’s comments reveal a strategic balancing act—acknowledging real challenges while maintaining confidence in Google’s position. His criticism of Microsoft’s reliance on OpenAI is particularly telling, suggesting Google sees its in-house AI capabilities as a competitive advantage as the industry shifts from scaling to innovation. The emphasis on reasoning and reliability over raw performance indicates a pivot toward practical, deployable AI rather than benchmark-chasing demos. This could actually benefit Google, whose infrastructure and research depth position it well for the “deeper breakthroughs” Pichai describes. However, his admission also validates concerns about an “AI winter”—a period of reduced progress and potentially deflated expectations. The industry may be entering a phase where incremental improvements replace revolutionary leaps, requiring patience from investors and more realistic planning from businesses betting on AI transformation. This honesty, while refreshing, could also temper the AI hype cycle that has driven massive valuations.
Why This Matters
Pichai’s candid assessment represents a significant moment of transparency from one of AI’s most powerful leaders, signaling a maturation of the AI industry beyond its initial explosive growth phase. His acknowledgment that “low-hanging fruit is gone” validates concerns that have been circulating among researchers and investors about the sustainability of current AI development approaches.
This matters because it could reshape investment strategies, research priorities, and business expectations around AI. If the era of easy gains from simply scaling models is ending, companies will need to invest more heavily in fundamental research and novel approaches—a shift that could favor established players like Google with deep research capabilities over startups relying on brute-force scaling.
The debate over AI’s progress also has profound implications for the broader economy. Businesses planning AI transformations, workers concerned about automation, and policymakers crafting AI regulations all need realistic assessments of the technology’s trajectory. If AI development is indeed slowing, it may provide more time for society to adapt, but it could also dampen the revolutionary expectations that have driven massive investment. The focus on reasoning and reliability over raw scale suggests the next generation of AI will prioritize quality and trustworthiness—critical factors for enterprise adoption and real-world deployment.
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Source: https://www.businessinsider.com/google-ceo-sundar-pichai-ai-wall-progress-harder-2024-12