My mental model of AI advancements is that of a step function with s-curves in each step [1]. Each time there is an algorithmic advancement, people quickly rush to apply it to both existing and new problems, demonstrating quick advancements. Then we tend to hit a kind of plateau for a number of years until the next algorithmic solution is found. Examples of steps include, AlexNet demonstrating superior image labeling, LeCun demonstrating DeepLearning, and now OpenAI demonstrating large transformer models.
I think in the past, at each stage, people tend to think that the recent progress is a linear or exponential process that will continue forward. This lead to people thinking self driving cars were right around the corner after the introduction of DL in the 2010s, and super-intelligence is right around the corner now. I think at each stage, the cusp of the S-curve comes as we find where the model is good enough to be deployed, and where it isn't. Then companies tend to enter a holding pattern for a number of years getting diminishing returns from small improvements on their models, until the next algorithmic breakthrough is made.
Right now I would guess that we are around 0.9 on the S curve, we can still improve the LLMs (as DeepSeek has shown wide MoE and o1/o3 have shown CoT), and it will take a few years for the best uses to be brought to market and popularized. As you mentioned, LeCun points out that LLMs have a hallucination problem built into their architecture, others have pointed out that LLMs have had shockingly few revelations and breakthroughs for something that has ingested more knowledge than any living human. I think future work on LLMs are likely to make some improvement on these things, but not much.
I don't know what it will be, but a new algorithm will be needed to induce the next step on the curve of AI advancement.
[1]: https://www.open.edu/openlearn/nature-environment/organisati...