A new study from MIT suggests the biggest and most computationally intensive AI models may soon offer diminishing returns compared to smaller models. By mapping scaling laws against continued improvements in model efficiency, the researchers found that it could become harder to wring leaps in performance from giant models whereas efficiency gains could make models running on more modest hardware increasingly capable over the next decade.
“In the next five to 10 years, things are very likely to start narrowing,” says Neil Thompson, a computer scientist and professor at MIT involved in the study.
Leaps in efficiency, like those seen with DeepSeek’s remarkably low-cost model in January, have already served as a reality check for the AI industry, which is accustomed to burning massive amounts of compute.
As things stand, a frontier model from a company like OpenAI is currently much better than a model trained with a fraction of the compute from an academic lab. While the MIT team’s prediction might not hold if, for example, new training methods like reinforcement learning produce surprising new results, they suggest that big AI firms will have less of an edge in the future.
Hans Gundlach, a research scientist at MIT who led the analysis, became interested in the issue due to the unwieldy nature of running cutting edge models. Together with Thompson and Jayson Lynch, another research scientist at MIT, he mapped out the future performance of frontier models compared to those built with more modest computational means. Gundlach says the predicted trend is especially pronounced for the reasoning models that are now in vogue, which rely more on extra computation during inference.
Thompson says the results show the value of honing an algorithm as well as scaling up compute. “If you are spending a lot of money training these models, then you should absolutely be spending some of it trying to develop more efficient algorithms, because that can matter hugely,” he adds.
The study is particularly interesting given today’s AI infrastructure boom (or should we say “bubble”?)—which shows little sign of slowing down.
OpenAI and other US tech firms have signed hundred-billion-dollar deals to build AI infrastructure in the United States. “The world needs much more compute,” OpenAI’s president, Greg Brockman, proclaimed this week as he announced a partnership between OpenAI and Broadcom for custom AI chips.
A growing number of experts are questioning the soundness of these deals. Roughly 60 percent of the cost of building a data center goes toward GPUs, which tend to depreciate quickly. Partnerships between the major players also appear circular and opaque.
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![Fintech startup Parker files for bankruptcy | TechCrunch
Parker, a well-funded startup offering corporate credit cards and banking services for e-commerce businesses, has filed for bankruptcy and is widely reported to have shut down.
The startup was part of Y Combinator’s winter 2019 cohort, and its Series A was led by Valar Ventures.
Parker came out of stealth in 2023, touting a corporate credit that it said was designed for use by e-commerce companies. At the time, co-founder and CEO Yacine Sibous said the startup’s “secret sauce” was an underwriting process that could properly assess e-commerce cash flows.
“We imagined building better financial products for e-commerce founders with the mission of increasing the number of financially independent people,” Sibous told TechCrunch.
Parker’s website is still up and doesn’t mention any shutdown. Instead, a banner at the top boasts that the company has raised more than 0 million in total funding, including a 5 million lending arrangement.
However, multiple social media posts state that Parker’s credit card partner Patriot Bank sent a message to customers this week confirming the shutdown. Parker’s competitors seemed to jump on the news with their own posts seeking to lure over the startup’s former customers.
And Parker’s troubles seem to be confirmed in its May 7 filing for Chapter 7 bankruptcy protection. The filing states that the company has between million and 0 million in assets, with liabilities in the same range. It also states that Parker has between 100 and 199 creditors.
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San Francisco, CA
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October 13-15, 2026
Fintech consultant Jason Mikula recently claimed that Parker had been in negotiations for a potential acquisition, with the failure of those talks ultimately leading to the startup’s abrupt shutdown. Mirkula added that this “has left small business customers in a tough spot” and also raised “questions about [banking partner] Piermont’s and Patriot’s oversight of the program.”
Parker did not immediately respond to an email from TechCrunch.
The company’s CEO Sibous has not explicitly acknowledged the shutdown or bankruptcy on LinkedIn, and in a recent post, he repeated the 0 million funding figure, adding that the company had reached million in revenue. But he also said that if he started over, he’d do some things differently, such as: “Avoid over-hiring, reactive decisions, and doomsayers.”
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.#Fintech #startup #Parker #files #bankruptcy #TechCrunchParker,Valar Ventures,Y Combinator,Yacine Sibous](https://i0.wp.com/techcrunch.com/wp-content/uploads/2023/03/tech-crunch-photo.png?resize=1200%2C674&ssl=1 "Fintech startup Parker files for bankruptcy | TechCrunch
Parker, a well-funded startup offering corporate credit cards and banking services for e-commerce businesses, has filed for bankruptcy and is widely reported to have shut down.
The startup was part of Y Combinator’s winter 2019 cohort, and its Series A was led by Valar Ventures.
Parker came out of stealth in 2023, touting a corporate credit that it said was designed for use by e-commerce companies. At the time, co-founder and CEO Yacine Sibous said the startup’s “secret sauce” was an underwriting process that could properly assess e-commerce cash flows.
“We imagined building better financial products for e-commerce founders with the mission of increasing the number of financially independent people,” Sibous told TechCrunch.
Parker’s website is still up and doesn’t mention any shutdown. Instead, a banner at the top boasts that the company has raised more than 0 million in total funding, including a 5 million lending arrangement.
However, multiple social media posts state that Parker’s credit card partner Patriot Bank sent a message to customers this week confirming the shutdown. Parker’s competitors seemed to jump on the news with their own posts seeking to lure over the startup’s former customers.
And Parker’s troubles seem to be confirmed in its May 7 filing for Chapter 7 bankruptcy protection. The filing states that the company has between million and 0 million in assets, with liabilities in the same range. It also states that Parker has between 100 and 199 creditors.
Techcrunch event
San Francisco, CA
|
October 13-15, 2026
Fintech consultant Jason Mikula recently claimed that Parker had been in negotiations for a potential acquisition, with the failure of those talks ultimately leading to the startup’s abrupt shutdown. Mirkula added that this “has left small business customers in a tough spot” and also raised “questions about [banking partner] Piermont’s and Patriot’s oversight of the program.”
Parker did not immediately respond to an email from TechCrunch.
The company’s CEO Sibous has not explicitly acknowledged the shutdown or bankruptcy on LinkedIn, and in a recent post, he repeated the 0 million funding figure, adding that the company had reached million in revenue. But he also said that if he started over, he’d do some things differently, such as: “Avoid over-hiring, reactive decisions, and doomsayers.”
When you purchase through links in our articles, we may earn a small commission. This doesn’t affect our editorial independence.#Fintech #startup #Parker #files #bankruptcy #TechCrunchParker,Valar Ventures,Y Combinator,Yacine Sibous")
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