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This is a false dichotomy. Functionally the reality is in the middle. They "memorize" training data in the sense that the loss curve is fit to these points but at test time they are asked to interpolate (and extrapolate) to new points. How well they generalize depends on how well an interpolation between training points works. If it reliably works then you could say that interpolation is a good approximation of some grammar rule, say. It's all about the data.
Sometimes a sufficiently good model of a surface is completely identical to a model of the volume.
Copilot fails the cleanly refactor complex Java methods in a way that I’m better of writing that stuff by my own as I have to understand it anyways.
And the news that they don’t scale as predicted is too bad compared to how weak they currently perform…