It probably will lead to people needing to be extremely talented in computer science and mathematics at an even higher level, maybe those currently at the top need more competition to press even further ahead?

No one knows the answer. However, trusting your curiosity and going where it takes you may be a reasonable strategy. If the model asymptotes, you will be ready to figure out how to build upon it and if not, at least you will have had fun satiating your curiousity!

I studied physics, and most of my classmates did not end up doing anything with physics. Many are in finance or insurance or programming positions. In general, studying anything challenging (from theatre to theoretical computer science) gives some specific skills and some general abilities that etsure it isn't a complete waste even if you end up doing something different.

(That said, this is not fun, and I sympathise! I'm still a student and would like to avoid finance if at all possible. Just suggesting not to drop everything if you feel like you're learning in the process.)

(I'm now personally in the position of having to choose a PhD project, and this rapid change is interacting with making long-term plans really badly. Guidance welcome!)

I think this depends a lot on what you plan to do after your PhD. Moving to industry you will likely not use the direct work of your PhD, and instead you will rely on your broad knowledge, intuition, rigor, ability to learn hard things, and extend that to bring new research developments into practice, all of which are largely unrelated to AI scooping math proofs of prize problems.

> I'm not quite sure what to do. Any thoughts from people in similar positions?

Almost every single person who earns money for labor is, or will very soon be, in exactly the same position as you, many are just either unaware of how fast the change is coming or are deep in denial about it.

None of us know what to do about it other than hope that we find a peaceful political solution prior to the economic collapse.