Analyst Claims Tesla and OpenAI Mark Beginning of AI Era

A new artificial intelligence era is expected to begin in 2025, according to New Street Research analyst Pierre Ferragu. This prediction is based on breakthrough developments in Tesla Inc.’s Full Self-Driving technology and OpenAI’s latest O3 model.

What Happened

Pierre Ferragu published a detailed research note emphasizing the remarkable performance of OpenAI’s O3 model on the Advanced Reasoning Corpus – Artificial General Intelligence benchmark. This testing framework assesses the reasoning and problem-solving abilities of AI systems. The O3 model achieved an impressive 87.5% score, nearing human-level capabilities and marking a substantial improvement over previous AI models.

Breakthrough in AI Capabilities

The founder of the ARC-AGI foundation, François Chollet, describes this achievement as “not merely incremental improvement, but a genuine breakthrough, marking a qualitative shift in AI capabilities.” The O3 model is set for release in January and demonstrates remarkable improvements across multiple benchmarks, including:

  • 71.7% accuracy in software engineering tasks, matching human professional performance
  • Scoring 2,727 Elo in competitive coding, surpassing many expert programmers

Inflection Point in AI Era

Pierre Ferragu believes that the combination of Tesla’s Full Self-Driving technology and OpenAI’s O3 model marks the beginning of a new AI era. He tweeted, “Between FSD v13.2.2 driving me around with literally no intervention and o3 scoring 88% at ARC-AGI, I do believe the inflection is now. 2025 will be year zero of the AI era.”

Implications and Challenges

While these advances are significant, they come with substantial computational costs. The high-performance version of O3 requires approximately 2,000 times more computing power than its predecessor, with a single AGI task costing about $3,500 to process. Ferragu suggests that this breakthrough has significant implications for AI infrastructure providers, indicating potential investment opportunities in the sector.

Future of Artificial General Intelligence

Although the O3 model represents a major step toward Artificial General Intelligence, it hasn’t achieved full AGI status yet. The model is expected to face challenges with next-generation tests, where estimates suggest it may not exceed 25% accuracy. Nevertheless, the progress made by OpenAI and Tesla marks the beginning of an exciting new era in artificial intelligence.