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Figure reaches $39B valuation in latest funding round

Chase by Chase
September 25, 2025
Reading Time: 3 mins read
0

## Beyond Scale: Deconstructing the Myth of Emergent Abilities in LLMs

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For the past several years, a single, powerful narrative has dominated the development of Large Language Models (LLMs): the scaling hypothesis. The premise is simple and intoxicatingly effective—if you increase a model’s parameter count, training data, and compute, its performance will predictably improve. This led to the observation of so-called “emergent abilities,” complex skills like multi-step reasoning or chain-of-thought prompting that seem to appear spontaneously once a model crosses a certain size threshold.

This idea has fueled an arms race for ever-larger models, with the assumption that true AGI lies just over the next scaling horizon. However, a growing body of research and a new class of highly efficient models are forcing us to re-evaluate this core belief. What if “emergence” isn’t a magical property of scale, but rather an illusion created by our methods of evaluation and a misunderstanding of our data?

—

### The Real Driver: Data Density and Architectural Finesse

The critique of the emergence narrative rests on two fundamental pillars: the quality of our data and the intelligence of our architectures.

#### 1. The Data Density Argument

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The classic view suggests that a skill like arithmetic is “emergent” because smaller models fail at it completely, while larger models suddenly succeed. The alternative, more plausible explanation is that examples of arithmetic reasoning are present but extremely sparse within massive, web-scraped datasets.

Think of it this way: a small model, during its training, may only encounter a few thousand examples of multi-digit addition, not enough to generalize the underlying principles. A model 100 times larger, trained on a proportionally larger dataset, will see hundreds of thousands of such examples. To an external observer measuring performance on a sharp, non-linear metric (e.g., exact match accuracy), the model’s capability appears to jump from 0% to 80% suddenly. In reality, the underlying competence was building gradually and linearly all along; it just hadn’t crossed the threshold for consistent, correct application.

Recent models like Microsoft’s Phi-2 provide compelling evidence for this. At just 2.7 billion parameters, Phi-2 outperforms models 25 times its size on complex reasoning benchmarks. The secret isn’t scale; it’s the training data. It was trained not on a random firehose of the internet, but on “textbook-quality” synthetic and curated data, deliberately designed to instill reasoning and knowledge. This suggests that capability is less about the raw quantity of data and more about its conceptual density and quality.

#### 2. The Architectural Finesse Argument

The second pillar is the evolution beyond monolithic, dense architectures. The brute-force scaling approach treats every parameter as active for every single token processed. This is computationally inefficient and, as we’re learning, not strictly necessary.

Enter architectures like **Mixture of Experts (MoE)**, famously used in models like Mixtral 8x7B. In an MoE model, the network is composed of numerous smaller “expert” sub-networks. For any given input, a routing mechanism activates only a small fraction of these experts—the ones best suited for the task at hand.

This is a paradigm shift. An MoE model might have a massive total parameter count (e.g., 47 billion for Mixtral), but it only uses a fraction of that (e.g., 13 billion) for any single inference. This achieves the performance benefits associated with large models while maintaining the speed and computational efficiency of a much smaller one. This isn’t just making the model bigger; it’s making it smarter and more specialized. It demonstrates that intelligent design can achieve what was previously thought to require brute-force scale.

—

### Conclusion: From Bigger to Smarter

The implications of this shift in perspective are profound. The future of AI development is not just a race to the largest possible model. Instead, it’s a more deliberate and scientific endeavor focused on:

* **Data Engineering:** Curation, synthesis, and curriculum learning will become as important as raw data volume. We will move from being data janitors to data architects.
* **Efficient Architectures:** The focus will be on designing models that use their parameters and compute more intelligently, like MoE and other sparse activation techniques.
* **Precise Evaluation:** We need to develop evaluation metrics that can detect gradual learning curves instead of creating the illusion of sudden, sharp leaps in capability.

The era of “scaling is all you need” is giving way to a more nuanced understanding. The next great leap in AI won’t be achieved simply by building a bigger black box. It will come from meticulously engineering the data we put into it and intelligently designing the box itself. The magic isn’t in the scale; it’s in the science.

This post is based on the original article at https://techcrunch.com/2025/09/16/figure-reaches-39b-valuation-in-latest-funding-round/.

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