Does Scaling Toward AGI Depend on What System-1 Lets System-2 Execute?

Is monolithic scaling the only path to AGI? This paper challenges the dogma that purely scaling a single model is sufficient to achieve Artificial General Intelligence. Instead, we identify Agentic AI as a necessary paradigm for mastering the complex, heterogeneous distribution of real-world tasks. Through rigorous theoretical derivations, we contrast the optimization constraints of monolithic learners against the efficiency of Agentic systems, progressing from simple routing mechanisms to general Directed Acyclic Graph (DAG) topologies. We demonstrate that Agentic AI achieves exponentially superior generalization and sample efficiency. Finally, we discuss the connection to Mixture-of-Experts, reinterpret the instability of current multi-agent frameworks, and call for greater research focus on Agentic AI.

AI scaling studies increasingly evaluate systems that combine a pretrained model with retrieval, search, verification, tools, and interaction. Yet a higher score under a larger budget does not by itself show where additional resources are best spent. This critical integrative review asks when a reported scaling result supports a resource-allocation decision. It compares evidence across pretraining, test-time computation, retrieval, and agent evaluation, distinguishing the performance of a tested procedure from the best performance achievable under a resource limit. The synthesis shows that three mismatches recur across this evidence: success counted before an answer is chosen, information a deployed system will not have, and costs left out of the comparison. A capability surface expresses performance as a function of budgets, mechanisms, and available information. Worked analytical examples show how the evaluation metric, deployment volume, selection rule, and stopping policy can alter an allocation conclusion. A resource envelope provides a structured record of the task, development and run-time resources, information access, and procedure behind a reported score. Its application to a published comparison illustrates which conclusions the evidence supports and which deployment questions remain unresolved. The resulting framework specifies the comparisons needed to choose among feasible systems and motivates experiments on the transfer of allocation rules across tasks and operating conditions. It does not propose a universal scaling law or infer general intelligence from benchmark gains.

To operate reliably under changing conditions, complex systems require feedback on how effectively they use resources, not just whether objectives are met. Current AI systems process vast information to produce sophisticated predictions, yet predictions can appear successful while the underlying interaction with the environment degrades. What is missing is a principled measure of how much of the total information a system deploys is actually shared between its observations, actions, and outcomes. We prove this shared fraction, which we term bipredictability, P, is intrinsic to any interaction, derivable from first principles, and strictly bounded: P can reach unity in quantum systems, P equal to, or smaller than 0.5 in classical systems, and lower once agency (action selection) is introduced. We confirm these bounds in a physical system (double pendulum), reinforcement learning agents, and multi turn LLM conversations. These results distinguish agency from intelligence: agency is the capacity to act on predictions, whereas intelligence additionally requires learning from interaction, self-monitoring of its learning effectiveness, and adapting the scope of observations, actions, and outcomes to restore effective learning. By this definition, current AI systems achieve agency but not intelligence. Inspired by thalamocortical regulation in biological systems, we demonstrate a feedback architecture that monitors P in real time, establishing a prerequisite for adaptive, resilient AI.