I think it's better to think of the hutter prize as a challenge to see how close people can get to efficiently approximating AIXI without the exponential cost of AIXItl. The fact that winners don't generalize well is just that they're not great approximations, because the behavior is different in the limit.
replyThe winner generalize really well. They're just incredibly slow.
replyMost of the neural compressors are trying to squeeze every last bit out by sacrificing runtime. You can speed them up a fair bit and they're pretty good. fast-cmix with a small priming corpus will probably be about twice as compact as something like lzma or brotli.