The Three AI Frontiers of Strategic Investment That Define the Next Decade

Severin Sorensen
2 days ago
2 min read

In 2014, Max Tegmark showed Googlers a landscape of AI challenges illustrated through towering mountains labeled Art, Programming, and Book Writing that seemed far beyond reach. His warning was that the sea level will eventually rise and submerge everything. A decade later, those once-impossible peaks are now fully underwater.

This is the very challenge illuminated by our "2025 Update" (shown below) to Tegmark’s evolving landscape of AI. The waters keep rising, but the highest peaks still stand. The rising waters, shown as the "Sea of AI Capabilities,” have already submerged tasks like programming, cinematography, and even much of routine science.

So, what mountains remain? Continue reading for the three frontiers of strategic investment that will define competitive advantage in the age of exponential AI.

The Three Frontiers

The “2025 Update” identifies three enduring mountains where businesses must focus their R&D, talent acquisition, and strategic partnerships to secure high ground. These are the new vectors of value creation.

Embodied Intelligence (Moravec's Paradox)

This peak represents the challenge of AI operating effectively in the real world: sensing, navigating, and acting with the dexterity of humans, or better. Competitive advantage will shift to companies that can solve the "last mile" of automation in physical domains: advanced robotics for logistics, autonomous infrastructure inspection, and precision manufacturing, moving beyond simple data centers into complex, unstructured environments.

Reliable Causal Reasoning & Novel Truth

Current AI is often a powerful correlator. This mountain demands AI that can reliably understand cause and effect, generate truly novel insights, and function as a scientific co-pilot. The next generation of value will be created by AI that can move from summarizing data to inventing new products (novel truth) or performing diagnostics that uncover the why behind complex failures (causal reasoning), rather than just predicting them.

High-Stakes Social Dynamics & Theory of Mind

The final, and arguably most challenging, peak involves AI's ability to handle complex human interaction, negotiation, and emotional context. This is the future of customer service, sales, and internal leadership. The ultimate competitive edge will belong to systems that can lead teams, mediate sensitive negotiations ("Complex Negotiation" on the map), or provide reliable, nuanced therapeutic support. Trust and relationship management will be mediated by AI with high fidelity to human psychology.

The New Competitive Edge

Resources should no longer be optimized for activities already beneath the waterline. To survive the rising sea, executives must shift strategic focus to these three remaining peaks.

This requires not only technical investment but a renewed focus on governance. Since these peaks involve AI operating in the physical world, making causal decisions, and managing human relationships, the risk of misalignment (AI failure or ethical compromise) rises exponentially.

The CEO of today must, therefore, be the chief mountaineer, investing in the gear (talent and compute) to climb the three peaks, while simultaneously enforcing the safety protocols (governance and ethics) that ensure the ascent is sustainable, aligned, and ultimately, profitable. The 2025 update is not just a map of what's left to do; it's a reflection of where to focus your organization's entire future.