AI Will Kill The Software Industry
Welcome to the Real Estate Espresso Podcast, your morning shot on what’s new in the world of real estate investing. I’m your host, Victor Menasce. On today’s show, we’re taking a look at a major step forward in generative artificial intelligence. The latest release from OpenAI is called OH3, which is the premier model, and then there’s another one called OH3 Mini, which is faster, more efficient and uses less electricity.
About three months ago, they announced OH1, and now three months later, we have OH3. Technically, they could have named it OH2, but Sam Altman, the CEO of OpenAI, said they avoided it due to a UK telecom company already named O2. So, they went ahead and named it OH3.
What sets this apart from other AI tools is a new technique called “Chain of Thought”, what they term as reasoning models. When strung together, they form Chain of Thought models, which are very different from the simple prompts available in chat GPT. A few years back, in 2019, a benchmark called the ARQ was created to test the sophistication of AI. Until now, no model has even gotten close to touching it. However, within the past three months, the new state-of-the-art score on this benchmark was hit by OH3.
One of the tasks in this benchmark is a ‘fill in the blank’ type exercise that involves pattern recognition. Traditional AI models have done a terrible job at filling in these blank tests, however, under OH3, there’s a significant improvement. There are an increasing number of AI agents that can perform work for you and the need for software is decreasing as these functions can be performed by an AI agent acting on the database.
In a recent interview, Satya Nadella, the CEO of Microsoft, highlighted where AI is heading in terms of revolutionizing software development and applications. Under the OH1 model, depending on the computation length and the amount of electricity thrown at the problem, the benchmark got a score between 25 at the low end to 32 at the high end. The new OH3 model on the same benchmark scored 75.7 on low and 87.5 on high, marking a significant leap in just three months.
Furthermore, on the software engineering benchmark, OH1 achieved a score of approximately 49%, and OH3 achieved 71.7%. All these improvements happened in merely a three-month window, showing the immense pace of these advancements. So much so, that we can expect the OH4 to be as proficient as some of the top programmers in the world.
The implication is groundbreaking. AI may soon replace top-grade software developers earning hundreds of thousands per year to AI agents who can perform the same complexity of functions as a software application.
Applications as we know them could cease to exist and businesses that rely on monthly subscriptions for canned software might become redundant. Predictions such as these have given Satya Nadella the confidence to predict the death of the software industry as we know it, and its replacement by AI agents.
The implications for businesses and business processes are enormous. As you think about that, have an awesome rest of your day! Go make some great things happen. We’ll talk to you again tomorrow.
Stay connected and discover more about my work in real estate and by visiting and following me on various platforms:
Real Estate Espresso Podcast:
- 🎧 Spotify: The Real Estate Espresso Podcast
- 🌐 Website: www.victorjm.com
- 💼 LinkedIn: Victor Menasce
- 📺 YouTube: The Real Estate Espresso Podcast
- 📘 Facebook: www.facebook.com/realestateespresso
- 📧 Email: [email protected]
Y Street Capital:
- 🌐 Website: www.ystreetcapital.com
- 📘 Facebook: www.facebook.com/YStreetCapital
- 📸 Instagram: @ystreetcapital
