The AI Boom’s Multi-Billion Dollar Blind Spot

AI reasoning models were supposed to be the industry’s next leap, promising smarter systems able to tackle more complex problems. Now, a string of research is calling that into question. In June, a team of Apple researchers released a white paper titled “The Illusion of Thinking,” which found that once problems get complex enough, AI reasoning models stop working. Even more concerning, the models aren’t “generalizable,” meaning they might be just memorizing patterns instead of coming up with genuinely new solutions. Researchers at Salesforce, Anthropic and other AI labs have also raised red flags. The constraints on reasoning could have major implications for the AI trade, businesses spending billions on AI, and even the timeline to superhuman intelligence. CNBC’s Deirdre Bosa explores the AI industry’s reasoning problem. Chapters: 00:00 Introduction 1:16 Is reasoning overhyped? 6:23 AI trade at risk 9:29 The superintelligence illusion Anchor: Deirdre Bosa Produced by: Jasmine Wu, Laura Batchelor, Drew Troast Edited by: Matt Soto Animation: Jason Reginato, Josh Kalven Senior Director of Video: Jeniece Pettitt » Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision » Watch CNBC on the go with CNBC+: https://www.cnbc.com/WatchCNBCPlus About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more. Do you want to buy a home but don’t know where to begin? Take CNBC’s new online course How to Buy Your First Home. Register today and use coupon code EARLYBIRD for an introductory discount of 30% off $97 (+taxes and fees) through July 15, 2025: https://cnb.cx/3STNNhr Connect with CNBC News Online Get the latest news: https://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC Follow CNBC on Threads: https://cnb.cx/threads Follow CNBC News on X: https://cnb.cx/FollowCNBC Follow CNBC on WhatsApp: https://cnb.cx/WhatsAppCNBC #CNBC The AI Boom’s Multi-Billion Dollar Blind Spot