Apple has cast doubt on the possibility of achieving Artificial General Intelligence (AGI) by highlighting a significant limitation in how current AI models perform under complex challenges. A new report published by Apple titled ‘The Illusion of Thinking,’ reveals that advanced AI models, including Claude 3.7 and Deepseek-R1, struggle to handle higher-complexity problems even when explicitly instructed on how to solve them. Consequently, the race for AGI has shifted focus from model size to data quality and variety as tech giants like Google, game developers, and blockchain innovators seek new paths in AI training. Apple’s findings come at a pivotal time, challenging the hype around the current state of Artificial General Intelligence and ushering in a new era for AI development. The report found that while models excel at simple tasks, they fail dramatically as problems increase in complexity, even when given clear instructions on how to solve them. These limitations are being countered by the use of gaming data, which has become an essential resource for training AI. Gamers generate a vast amount of high-frequency human cognition samples during gameplay, from complex decisions like parry misses to critical healing maneuvers, all under stress. This provides valuable data that is already utilized in areas such as logistics, medicine, and even autonomous vehicle development. However, the use of this data has also ignited concerns regarding privacy and security. The introduction of eye-tracking headsets and pulse-reading haptics has raised questions about data privacy, prompting the creation of regulations like the EU’s AI Act and zero-knowledge proofs to ensure secure and auditable data transfer. While Apple’s research reveals a potential bottleneck in current AI technology, it also opens up new possibilities for innovation. The report suggests that the next leap in AI development will likely be driven by who controls the most valuable datasets rather than who trains the largest models. This shift is leading to a new battleground for data ownership and control, with companies like Google, game studios, and blockchain innovators actively seeking opportunities to leverage this crucial resource for further advancement in artificial intelligence.