1. Manually add more and more common-sense knowledge and extend the inference engine
2. ???
3. AGI!
That's the same impression I had in the early days of expert systems. I once made the comment, "It's not going to work, but it's worth trying to find out why it won't work." I was thinking that rule-based inference was a dead end, but maybe somebody could reuse the knowledge base with something that works better.