Your threshold theory is basically Amara's Law with better psychological scaffolding. Roy Amara nailed the what ("we tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run") [1] but you're articulating the why better than most academic treatments. The invisible-to-researchers phase followed by the sudden usefulness cascade is exactly how these transitions feel from the inside.

This reminds me of the CPU wars circa 2003-2005. Intel spent years squeezing marginal gains out of Pentium 4's NetBurst architecture, each increment more desperate than the last. From 2003 to 2005, Intel shifted development away from NetBurst to focus on the cooler-running Pentium M microarchitecture [2]. The whole industry was convinced we'd hit a fundamental wall. Then boom, Intel released dual-core processors under the Pentium D brand in May 2005 [2] and suddenly we're living in a different computational universe.

But teh multi-core transition wasn't sudden at all. IBM shipped the POWER4 in 2001, the first non-embedded microprocessor with two cores on a single die [3]. Sun had been preaching parallelism since the 90s. It was only "sudden" to those of us who weren't paying attention to the right signals.

Which brings us to the $7 trillion question: where exactly are we on the transformer S-curve? Are we approaching what Richard Foster calls the "performance plateau" in "Innovation: The Attacker's Advantage" [4], where each new model delivers diminishing returns? Or are we still in that deceptive middle phase where progress feels linear but is actually exponential?

The pattern-matching pessimist in me sees all the classic late-stage S-curve symptoms. The shift from breakthrough capabilities to benchmark gaming. The pivot from "holy shit it can write poetry" to "GPT-4.5-turbo-ultra is 3% better on MMLU." The telltale sign of technological maturity: when the marketing department works harder than the R&D team.

But the timeline compression with AI is unprecedented. What took CPUs 30 years to cycle through, transformers have done in 5. Maybe software cycles are inherently faster than hardware. Or maybe we've just gotten better at S-curve jumping (OpenAI and Anthropic aren't waiting for the current curve to flatten before exploring the next paradigm).

As for whether capital can override S-curve dynamics... Christ, one can dream.. IBM torched approximately $5 billion on Watson Health acquisitions alone (Truven, Phytel, Explorys, Merge) [5]. Google poured resources into Google+ before shutting it down in April 2019 due to low usage and security issues [6]. The sailing ship effect (coined by W.H. Ward in 1967, where new technology accelerates innovation in incumbent technology)[7] si real, but you can't venture-capital your way past physics.

I think we can predict all this capital pouring in to AI might actually accelerate S-curve maturation rather than extend it. All that GPU capacity, all those researchers, all that parallel experimentation? We're speedrunning the entire innovation cycle, which means we might hit the plateau faster too.

You're spot on about the perception divide imo. The overhyped folks are still living in 2022's "holy shit ChatGPT" moment, while the skeptics have fast-forwarded to 2025's "is that all there is?" Both groups are right, just operating on different timescales. It's Schrödinger's S-curve where we things feel simultaneously revolutionary and disappointing, depending on which part of the elephant you're touching.

The real question I have is whether we're approaching the limits of the current S-curve (we probably are), but whether there's another curve waiting in the wings. I'm not a researcher in this space nor do I follow the AI research beat to weigh in but hopefully someone in the thread can? With CPUs, we knew dual-core was coming because the single-core wall was obvious. With transformers, the next paradigm is anyone's guess. And that uncertainty, more than any technical limitation, might be what makes this moment feel so damn weird.

References: [1] "Amara's Law" https://en.wikipedia.org/wiki/Roy_Amara [2] "Pentium 4" https://en.wikipedia.org/wiki/Pentium_4 [3] "POWER4" https://en.wikipedia.org/wiki/POWER4 [4] Innovation: The Attacker's Advantage - https://annas-archive.org/md5/3f97655a56ed893624b22ae3094116... [5] IBM Watson Slate piece - https://slate.com/technology/2022/01/ibm-watson-health-failu... [6] "Expediting changes to Google+" - https://blog.google/technology/safety-security/expediting-ch... [7] "Sailing ship effect" https://en.wikipedia.org/wiki/Sailing_ship_effect.

One thing I think is weird in the debate is it seems people are equating LLMs with CPU’s, this whole category of devices that process and calculate and can have infinite architecture and innovation. But what if LLMs are more like a specific implementation like DSP’s, sure lots of interesting ways to make things sound better, but it’s never going to fundamentally revolutionize computing as a whole.