This seems to be quite similar to Robin Hanson's Ubertool argument.
More generally, humans within organizations self-modify using communication and training.
The bottleneck that's been pointed out to me so far are the bottlenecks related to wetware as a computing platform. But since AGI, as far as I can tell, can't directly change its hardware through recursive self-modification, I don't see how that bottleneck puts AGI at an immediate, FOOMy advantage.
The problems with wetware are not that it's hard to change the hardware -- it's that there is very little that seems to be implemented in modifiable software. We can't change the algorithm our eyes use to assemble images (this might be useful to avoid autocrorecting typos). We can't save the stack when an interrupt comes in. We can't easily process slower in exchange for more working memory.
We have have limits in how much we can self-monitor. Consider writing PHP code which manually generates SQL statements. It would be nice if we could remember to always escape our inputs to avoid SQL injection attacks. And a computer program could self-modify to do so. A human could try, but it is inevitable that they would on occasion forget (see Wordpress's history of security holes).
We can't trivially copy our skills -- if you need two humans who can understand a codebase, it takes approximately twice as long as it takes for one. If you want some help on a project, you end up spending a ton of time explaining the problem to the next person. You can't just transfer your state over.
None of these things are "software", in the sense of being modifiable. And they're all things that would let self-improvement happen more quickly, and that a computer could change.
I should also mention that an AI with a FPGA could change its hardware. But I think this is a minor point; the flexibility of software is simply vastly higher than the flexibility of brains.
If I understand the Singularitarian argument espoused by many members of this community (eg. Muehlhauser and Salamon), it goes something like this:
I'm in danger of getting into politics. Since I understand that political arguments are not welcome here, I will refer to these potentially unfriendly human intelligences broadly as organizations.
Smart organizations
By "organization" I mean something commonplace, with a twist. It's commonplace because I'm talking about a bunch of people coordinated somehow. The twist is that I want to include the information technology infrastructure used by that bunch of people within the extension of "organization".
Do organizations have intelligence? I think so. Here's some of the reasons why:
I talked with Mr. Muehlhauser about this specifically. I gather that at least at the time he thought human organizations should not be counted as intelligences (or at least as intelligences with the potential to become superintelligences) because they are not as versatile as human beings.
...and then...
I think that Muehlhauser is slightly mistaken on a few subtle but important points. I'm going to assert my position on them without much argument because I think they are fairly sensible, but if any reader disagrees I will try to defend them in the comments.
Mean organizations
* My preferred standard of rationality is communicative rationality, a Habermasian ideal of a rationality aimed at consensus through principled communication. As a consequence, when I believe a position to be rational, I believe that it is possible and desirable to convince other rational agents of it.