I'm bullish (and scared) about AI progress precisely because I think they've only gotten a little less dim-witted in the last few years, but their practical capabilities have improved a lot thanks to better knowledge, taste, context, tooling etc.
What scares me is that I think there's a reasoning/agency capabilities overhang. ie. we're only one or two breakthroughs away from something which is both kinda omniscient (where we are today), and able to out-think you very quickly (if only through dint of applying parallelism to actually competent outcome-modelling and strategic decision making).
That combination is terrifying. I don't think enough people have really imagined what it would mean for an AI to be able to out-strategise humans in the same way that they can now — say — out-poetry humans (by being both decent in terms of quality and super fast). It's like when you're speaking to someone way smarter than you and you realise that they're 6 steps ahead, and actively shaping your thought process to guide you where they want you to end up. At scale. For everything.
This exact thing (better reasoning + agency) is also the top priority for all of the frontier researchers right now (because it's super useful), so I think a breakthrough might not be far away.
Another way to phrase it: I think today's LLMs are about as good at snap judgements in most areas as the best humans (probably much better at everything that rhymes with inferring vibes from text), but they kinda suck at:
1. Reasoning/strategising step-by-step for very long periods
2. Snap judgements about reasoning or taking strategic actions (in the way that expert strategic humans don't actually need to think through their actions step-by-step very often - they've built intuition which gets them straight to the best answer 90% of the time)
Getting good at the long range thinking might require more substantial architectural changes (eg. some sort of separate 'system 2' reasoning architecture to complement the already pretty great 'system 1' transformer models we have). OTOH, it might just require better training data and algorithms so that the models develop good enough strategic taste and agentic intuitions to get to a near-optimal solution quickly before they fall off a long-range reasoning performance cliff.
Of course, maybe the problem is really hard and there's no easy breakthrough (or it requires 100,000x more computing power than we have access to right now). There's no certainty to be found, but a scary breakthrough definitely seems possible to me.
So at best their internal models are still just performance multipliers unless some breakthrough happened very recently, it might be a bigger multiplier but that still keeps humans with jobs etc and thus doesn't revolutionize much.