I am not really comforted by this argument against the singularity. It seems to rely on the fact that the evolving intelligence doesn't have access to the real world. Okay, but I wasn't really worried about the singularity inside a datacenter. I was worried about it once we wired up all the robots and sensors and power switches to AI controlled systems. We are still doing that, right?
the point is not lack of access to physical space, as much as that iteration fundamentally only gains speed by staying 'inside a mind', the moment you interact with the world you're bottlenecked.
Like, you can make the AI think super hard about what's the phrase that will convince your boss to give you a raise, but eventually you have to try a phrase and wait for their answer to have any idea whether the result was good or not. Without that, you don't know if you're improving the shot or just hallucinating aimlessly for hours.
Then, the speed of improvement is only as fast as the speed of iteration. The robot can learn to walk from falling, but it can't fall any faster than a real human, so it can't learn at 1M falls/second.