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The antics of AGI of 2023 is going to turn into the race to recursive AI (RSI) of 2027. Recursive self-improving AI could fundamentally reshape how we experience the world and fundamentally accelerate digital transformation in the years to come.
While Anthropic has been claiming they use Claude for the majority of their coding since quite a while, there are no signs that we are on the cup of RSI just yet in mid 2026.
However there are a surprising number of new AI startups that claim they are building recursive capabilities of AI into super valuable industries, like chip design. Many of them claim this is their academic focus now and the startup called Recursive Superintelligence really comes to mind most recently. You can imagine how AI engineering their own improvements can scale fairly quickly once and if it gets good at this.
But will this propel a new era of science, R&D and innovation broadly speaking? And what are the chances of these buzzy startups at being commercially successful and actually succeeding at what they propose will soon be possible? Let along with just Generative AI technology.
“At its core, recursive self-improvement (RSI) is a process where an artificial intelligence system reviews, rewrites, and optimizes its own source code or architecture to become smarter.”
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I believe 2027 will indeed feel like the entry point into a fundamentally different world post the three major AI IPOs of 2026. The vibe-shift in the AI ecosystem is going to be tangible.
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DeepSeek’s senior management has told potential investors in its ongoing 70 billion yuan ($10 billion) funding round that the startup will prioritize groundbreaking AI research over short-term commercialization.
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With AGI not a commercial benchmark worth talking about seriously, RSI becomes a more more concrete proposition. The idea of AI improving itself exponentially is a fundamental inflection point in the theory around the Technological singularity. Ray Kurzweil, in his book The Singularity is Near, (that I used to obsessed over many years ago) famously predicted that the singularity will occur by 2045. Now some believe that it could arrive anywhere between the years 2030 and 2045. Some see the rapid improvements of Generative AI’s capabilities as evidence it is indeed happening.
From AGI to RSI Goals for the Future of AI
“Today’s systems are nowhere near [AGI]. Doesn’t matter how many Erdős problems you solve… I think it’s far, far from what a true invention, or someone like Ramanujan, would have been able to do.” – Demis Hassabis, CEO of Google DeepMind and Nobel laureate for AlphaFold
Context: Demis Hassabis isn’t just Google DeepMind’s Czar, it turns out he’s an angel investor in Anthropic. It’s a tightly woven interconnected web of influence – where the network of startups spun out by DeepMind alumni have collectively raised a collective $14 billion plus since 2021.
Hassabis invested personally in the early/angel stage, before Anthropic became a major player valued in the tens or hundreds of billions, and I’d estimate could have up to a $2 Billion personal stake. These financial conflicts of interest are becoming quite common in the AI ecosystem especially clustered around OpenAI, Google DeepMind and Anthropic and their Alum.
“People familiar with the matter said Hassabis was an angel investor in Anthropic, which has since become a key AI rival and among the world’s fastest-growing start-ups. Google has separately invested billions of dollars in Anthropic as part of its cloud and AI partnership with the company.” – The FT
How much of an impact was Hassabis on Alphabet investing huge sums into Anthropic and using their TPUs do you suppose? Or decisions to partner with Blackstone on new Neo Cloud do you suppose?
Manufactured Geniuses hidden in the awesome demand for Compute?
Anthropic’s CEO Dario Amodei famously coined the AI concept “a country of geniuses in a data center” to describe future AI that surpasses human experts. If Hassabis is a seed investor in Amodie’s project, it makes sense why they seem on the same page. Clever marketing before an IPO, or something else?
A glorious scientific AI future or a glamorized work of the AI Aristocracy that appears to be forming around AI researchers whose rhetoric feels more like a marketing narrative than anything remotely academic on most days. Considering what we’ve been through with OpenAI, we have got to be skeptical. We are going to be betting on something fairly speculative to say the least but the switch from AGI to RSI is tangible driven by an industry wide pivot to Enterprise AI utility.
Why RSI is going to become a Race
That doesn’t stop the commercial capitalistic appeal of a technology that could potentially be capable of improving upon its own work automatically.
In my view 2027 marks the beginning of the Machine Economy era. Individual companies are betting on a nascent for of this with AI agents already while doing human layoffs. A cluster of frontier labs is pushing the emphasis on self-improving AI now as the driving theme. Venture Capitalists appears on board that this is a great approach for the future.
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