The Economics of Recursive Self-Improvement

Tom Cunningham, Lukas Althoff, Basil Halperin, Brian Jabarian, Andrew Koh, Arjun Ramani, Phil Trammell, Parker Whitfill and Cheryl Wu

Papers from arXiv.org

Abstract: We model the economics of recursive self-improvement (RSI) and assess its plausibility and impacts. First, we build a sequence of increasingly rich models of AI progress to highlight the feedback loops behind RSI. We represent our models as directed graphs and show that net acceleration in AI capabilities depends on the product of elasticities across each feedback loop. Second, we distinguish between "narrow" and "broad" AI capabilities, capturing the possibility that AI systems improve narrowly at optimizing AI R&D benchmarks without improving at broader economically valuable tasks. Third, we document existing estimates of key parameters and provide a wish list of empirical objects that AI companies can measure and feasibly share publicly. Finally, we calibrate the model with existing data. A back-of-the-envelope calculation suggests that feedback loops are not currently strong enough to generate a self-sustaining acceleration, though they appear to be strengthening. We conclude by assessing the plausibility and implications of such an acceleration.

Date: 2026-09
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