AGI Talk Dies Down as Silicon Valley Shifts to Pragmatism - August 25, 2025

Sam Altman got caught bullshitting. Again.

Six months ago, OpenAI's CEO was writing blog posts about how his company was "now confident we know how to build AGI." Last week on CNBC, he dismisses AGI as "not a super-useful term." That's not a strategic pivot—that's someone scrambling to cover their tracks after overpromising and underdelivering.

The whole AGI cult at OpenAI was always weird as hell. Ilya Sutskever literally had researchers doing campfire chants of "Feel the AGI!" while the sales team called themselves "AGI sherpas." These are grown-ass engineers and business people acting like they're in some Silicon Valley cargo cult, waiting for the digital messiah to descend from the cloud.

Now Altman wants everyone to forget he spent years hyping AGI as the next step in human evolution. But the internet doesn't forget, and neither do investors who've been burned by his impossible timelines.

GPT-5 Was Supposed to Be the Breakthrough. It Wasn't.

GPT-5 dropped in early August and basically nobody gave a shit. After two years of Altman promising that this would be the model to change everything, we got... slightly better routing. That's it. The same basic limitations, the same hallucination problems, wrapped in fancier architecture.

Even Ben Goertzel, who literally invented the term AGI, had to come out and explain that GPT-5 is "nowhere near true AGI." When the guy who coined the phrase is telling you to pump the brakes, maybe it's time to admit you've been overselling your chatbot.

Microsoft is apparently so fed up with the overpromising that they're trying to renegotiate their partnership agreement to remove the AGI clause entirely. You know you've fucked up when your biggest investor—who's already sunk $13 billion into your company—wants to delete the core promise from your deal.

Everyone's Backing Away from the AGI Hype Train

It's not just OpenAI eating crow. Eric Schmidt went from predicting AGI "within three to five years" in April to telling everyone to "stop fixating on superhuman AI" by August. That's a hell of a 180 in four months.

Andrew Ng and David Sacks are both publicly calling AGI "overhyped," which is Silicon Valley speak for "we got caught up in our own marketing bullshit." Investors are finally asking uncomfortable questions like "when exactly will this pay off?" instead of just throwing money at whatever has "AGI" in the pitch deck.

The dirty secret everyone's finally admitting? AI progress isn't "galloping ahead" like they claimed. We're getting incremental improvements packaged as revolutionary breakthroughs because that's what gets clicks and funding rounds.

The gap between "ChatGPT can write emails" and "artificial general intelligence" is a fucking chasm, not a small step. Silicon Valley spent two years pretending otherwise, and now reality is bitch-slapping everyone back to earth.

Companies aren't giving up on ambitious AI—they're just tired of getting roasted for promising the moon and delivering a slightly better autocomplete. The new message is basically "we're still building cool shit, we just won't call it the robot apocalypse."

Investors Finally Started Asking "Where's the Money?"

Shay Boloor from Futurum Equities basically told everyone what engineers have been thinking for years: "markets reward execution, not vague 'someday superintelligence' narratives." Translation: show me revenue, not Star Trek fantasies.

VCs spent two years throwing money at anything with "AGI" in the pitch deck. Now they're asking uncomfortable questions like "when will this make money?" and "what exactly does this do?" It only took a market correction and some reality checks for investors to remember that businesses need to actually generate value.

The New Plan: Build AI That's Actually Good at Specific Shit

Companies figured out that "build one AI to rule them all" was always a stupid goal. Daniel Saks from Landbase pointed out that the whole AGI hype was built on this fantasy of "a single, centralized AI that becomes all-knowing." Newsflash: that's not how intelligence works, artificial or otherwise.

The new approach is actually sensible: build AI that kicks ass at specific things. Better medical diagnosis, financial analysis that doesn't hallucinate numbers, code that doesn't break production. Revolutionary concept: make tools that are actually useful instead of pursuing the digital equivalent of becoming God.

This isn't a compromise—it's engineers finally being allowed to build practical solutions instead of chasing science fiction.

Or Maybe They're Just Trying to Dodge Regulators

Max Tegmark from the Future of Life Institute thinks Altman's sudden AGI amnesia is a dodge. He told Fortune this is like "a cocaine salesman saying that it's unclear whether cocaine is really a drug, because it's just so complex and difficult to decipher."

Harsh but probably accurate. The timing is suspicious as hell—right when governments are writing AI regulations, suddenly nobody wants to talk about building superintelligent machines anymore. They'll still pitch AGI to private investors, they just won't say it out loud where regulators can hear.

Same Risks, Different Marketing

Steven Adler, who actually worked at OpenAI, isn't buying the rebrand: "some AI companies are explicitly aiming to build systems smarter than any human. AI isn't there yet, but whatever you call this, it's dangerous and demands real seriousness."

Calling it "domain-specific intelligence" instead of AGI doesn't make it less risky. The same questions about alignment, control, and not accidentally building Skynet are still there. If anything, the PR makeover makes it easier to ignore the hard problems while racing ahead with development.