Compound interest is a fine analogy, it delivers a smooth exponential growth curve, and we have seen technological progress do likewise.

What I am arguing against is the "AI foom" claims that you can get faster growth than this, e.g. each successive doubling taking half the time. The reason this doesn't work is that each successive doubling is exponentially harder.

What if the output feeds back into the input, so the system as a whole is developing itself? Then you get the curve of capability, which is a straight line on a log-log graph, which again manifests itself as smooth exponential growth.