The problem with current LLMs, and also the reason for all the hallucinations (which honestly, you can think of as completely erronorous inferences because data is simply missing) is basically that they have a very incomplete understanding of the world. They are missing very fundamental parts that form our human understanding of things. They are limited, because at a fundamental level, they don't understand the world. Then on top of that, they are static, they cannot learn new things after the training. That's also part of why LLMs struggle so much to plan and complete even the easiest tasks. Without being even remotely clear about what reality is, relation between concepts get fuzzy, there is tons of noise and the chance that what the LLM plans has any bearing on the problem at all gets very small and the chance of it "completely missing the point" (we have all seen it happen) gets very big. I still think they are useful, surpass humans already in many tasks and have a long way to go to get even better, yet this is a fundamental truth. That's why an AI will let a city get nuked if the alternative is saying "Nigger". It doesn't understand the city nuking is bad, especially in the context how it was told how bad saying "Nigger" is. That's why it can't solve new logic puzzles, it simply doesn't understand the context in which that puzzle exists well. It's like trying to learn chinese by overhearing two chinese men talking for twenty minutes every tuesday for a month. You might gather a few things like how to say hello, but you won't be able to translate Shakespeare into chinese.
We see these mountains of data shoveled into their training, amounts of text a singular human could never read in a thousand lifetimes, let alone retain, and think it's inhumanely impressive and should be enough to become absolutely superintelligent and knowledgable on all topics but the reality is that the amount of data is absolutely dwarved by the amount of data (of course not in text form - I am talking about aural stimuli, visual stimuli, even body stimuli) a three year old has ingested in it's lifetime, (think about it, imagine the amount of data your brain deals with every second) which brings us back to that limitation that we don't know how to make these models learn by basically observing the world, unsupervised. Now think about how much of that text data is also useless noise containing no information whatsoever.
By the time you turned 18, naively assuming you slept 8 hours every day and sleep is completely and utterly useless (which is not true) you had over 100k hours of raw input from many sources through your body. That's magnitudes more data than written text that exists anywhere. (You'd have to ask a mathematician about that one, really) It's also not like you spent that time staring at a wall. You went to school. Socialized. Read books etc.. This gave you the capability to build such a comprehensive and general model of reality in your head that you can easily abstract and understand how these abstractions relate to each other. Hence you can easily predict outcomes, and with that, make complex plans. And even then, we all know 18 year olds are not exactly known for their wise planning. So not only did we give the LLM relatively little data, we also didn't really give it much of a context.
All the "common sense" knowledge that we collect and take for granted and don't really think about have absolutely nothing to do with text. LLMs have no way of having all that, so yes, they have no "common sense". Again, because they do not understand "our" world on a fundamental level.
Meta is working on giving AI more fundamental understanding. It's basically about abstraction.
I like the point LeCun is making there too implictly, AIs will never be like human intelligence simply because they never were human. They'll be their own thing, completely alien to how our mind works. I do personally think it's an engineering problem at this point, but that might just be me seeing every problem as a nail because I swung hammers all my life. I'm convinced it can be done in principle and I even believe faster than many would assume, alone because there is an immense amount of work happening on it right now. That's also why I don't believe anything has peaked, it hasn't really begun, really. I don't think the end result will be a human comparable intelligence but I can well imagine it will be a form of intelligence that can be equal to or surpassing ours on objective metrics, to the point where the distinction will be both fundamental but also at the same time philosophical for practical purposes. There is absolutely no reason to even believe for a second an intelligence like this has motivations even remotely comprehensible for us, if any, (things like wanting to dominate and violence really come from our genes which are a product of evolution where these tendencies were useful for procreation, nothing that has any relevance to an AI or would make sense to add to an AI) so scenarios like the basilisk are just psedointellectual, human-centric jerk off sessions.