To be more precise, it was 40m to simulate 1% of the neocortex.
Using Moores law we can postulate that it takes 17 years to increase computational power a thousand fold and 34 years to increase it a million times. So that should give you more intuïtion of what 1% actually means. In the course of a couple decades it would take 4 minutes to simulate 1 second of an entire neocortext (not the entire brain).
That doesn't sound too impressive either, but bear in mind that human brain <> strong AI. We are talking here about the physics model of the human brain, not the software architecture of an acutal AI. We could make it a million times more efficient if we trim the fat and keep the essence.
Our brains aren't the ultimate authority on intelligence. Computers already are much better at arithmetic, memory and data transmission.
This isn't considered to be intelligence by itself, but amplifies the ability of any AI at a much larger scale. For instance, Watson isn't all that smart because he had to read the entire Wikipedia and a lot of other sources before he could beat people on Jeopardy. But... he did read the entire Wikipedia, which is something no human has ever done.
Using Moores law we can postulate that it takes 17 years to increase computational power a thousand fold and 34 years to increase it a million times.
You are extrapolating Moore's law out almost as far as it's been in existence!
We could make it a million times more efficient if we trim the fat and keep the essence.
It's nice to think that, but no one understands the brain well enough to make claims like that yet.
Claim: The first human-level AIs are not likely to undergo an intelligence explosion.
1) Brains have a ton of computational power: ~86 billion neurons and trillions of connections between them. Unless there's a "shortcut" to intelligence, we won't be able to efficiently simulate a brain for a long time. http://io9.com/this-computer-took-40-minutes-to-simulate-one-second-of-1043288954 describes one of the largest computers in the world simulating 1s of brain activity in 40m (i.e. this "AI" would think 2400 times slower than you or me). The first AIs are not likely to be fast thinkers.
2) Being able to read your own source code does not mean you can self-modify. You know that you're made of DNA. You can even get your own "source code" for a few thousand dollars. No humans have successfully self-modified into an intelligence explosion; the idea seems laughable.
3) Self-improvement is not like compound interest: if an AI comes up with an idea to modify it's source code to make it smarter, that doesn't automatically mean it will have a new idea tomorrow. In fact, as it picks off low-hanging fruit, new ideas will probably be harder and harder to think of. There's no guarantee that "how smart the AI is" will keep up with "how hard it is to think of ways to make the AI smarter"; to me, it seems very unlikely.