...and "FOOM" means way the hell smarter than anything else around...

Questionable. Is smarter than human intelligence possible in a sense comparable to the difference between chimps and humans? To my awareness we have no evidence to this end.

Not, "ooh, it's a little Einstein but it doesn't have any robot hands, how cute".

Questionable. How is an encapsulated AI going to get this kind of control without already existing advanced nanotechnology? It might order something over the Internet if it hacks some bank account etc. (long chain of assumptions), but how is it going to make use of the things it orders?

Optimizing yourself is a special case, but it's one we're about to spend a lot of time talking about.

I believe that self-optimization is prone to be very limited. Changing anything substantial might lead Gandhi to swallow the pill that will make him want to hurt people, so to say.

...humans developed the idea of science, and then applied the idea of science...

Sound argumentation that gives no justification to extrapolate it to an extent that you could apply it to the shaky idea of a superhuman intellect coming up with something better than science and applying it again to come up...

In an AI, the lines between procedural and declarative knowledge are theoretically blurred, but in practice it's often possible to distinguish cognitive algorithms and cognitive content.

All those ideas about possible advantages of being an entity that can reflect upon itself to the extent of being able to pinpoint its own shortcoming is again, highly speculative. This could be a disadvantage.

Much of the rest is about the plateau argument, once you got a firework you can go to the moon. Well yes, I've been aware of that argument. But that's weak, that there are many hidden mysteries about reality that we completely missed yet is highly speculative. I think even EY admits that whatever happens, quantum mechanics will be a part of it. Is the AI going to invent FTL travel? I doubt it, and it's already based on the assumption that superhuman intelligence, not just faster intelligence, is possible.

Insights are items of knowledge that tremendously decrease the cost of solving a wide range of problems.

Like the discovery that P ≠ NP? Oh wait, that would be limiting. This argument runs in both directions.

If you go to a sufficiently sophisticated AI - more sophisticated than any that currently exists...

Assumption.

But it so happens that the AI itself uses algorithm X to store associative memories, so if the AI can improve on this algorithm, it can rewrite its code to use the new algorithm X+1.

Nice idea, but recursion does not imply performance improvement.

You can't draw detailed causal links between the wiring of your neural circuitry, and your performance on real-world problems.

How can he make any assumptions then about the possibility to improve them recursively, given this insight, to an extent that they empower an AI to transcendent into superhuman realms?

Well, we do have one well-known historical case of an optimization process writing cognitive algorithms to do further optimization; this is the case of natural selection, our alien god.

Did he just attribute intention to natural selection?