Tesla's FSD and OpenAI's O3 Model Signal a New AI Era in 2025

New Street Research analyst Pierre Ferragu foresees 2025 as a pivotal year, heralding the dawn of a new artificial intelligence era. His predictions are rooted in significant advancements in Tesla Inc.‘s Full Self-Driving (FSD) technology and OpenAI’s upcoming O3 model.

Recent Developments: In an insightful research report, Ferragu highlights the exceptional performance of OpenAI’s O3 model on the Advanced Reasoning Corpus - Artificial General Intelligence (AGI) benchmark. This benchmark evaluates the reasoning and problem-solving skills of AI systems.

The O3 model scored a remarkable 87.5%, coming close to human-level proficiency and representing a substantial leap forward compared to earlier models, which typically scored below 10%.

According to François Chollet, founder of the ARC-AGI foundation, "This is not just an incremental improvement; it is a real breakthrough, indicating a qualitative change in AI capabilities," as mentioned in Ferragu's report.

Set for release in January, the O3 model shows impressive advancements across various benchmarks. It achieved a 71.7% accuracy rate in software engineering tasks, equaling the performance of human professionals, and recorded a score of 2,727 Elo in competitive coding, exceeding the abilities of many expert programmers.

Ferragu asserts, "With FSD version 13.2.2 operating autonomously and O3 scoring 88% on the ARC-AGI benchmark, I believe the moment of change is here. The year 2025 will mark the beginning of the AI era." He shared his thoughts on social media to highlight this critical view.

Implications of Advancements: Such technological breakthroughs, however, come with considerable computational demands. The high-performance version of the O3 model requires about 2,000 times more computing power than its predecessor, with each AGI task costing approximately $3,500 to process.

Ferragu points out that these advancements have significant implications for AI infrastructure providers. He observes, "We are still at the very early stages of growth for AI infrastructure and its supply chain," suggesting potential investment prospects in this area.

While the O3 model is a significant leap towards achieving true AGI, Ferragu notes that it has not yet reached full AGI status. Upcoming tests may present challenges, with expectations that it could struggle to achieve more than 25% accuracy.

AI, Tesla, OpenAI