No, it wasn’t hardware against software. But, and it’s hard to understate this, software like x264 has many man years of intricate and clever optimization work

No, it wasn’t hardware against software. But, and it’s hard to understate this, software like x264 has many man years of intricate and clever optimization work under its belt. Just look through some of the development history to see the kind of hoops jumped through and low level clock tick counting tweaks that have been made. Also, I believe in general the expectations around AV1 have always been set realistically in the sense most are expecting that it will likely always require more compute to achieve a significant portion of any superior compression. Important as those caveats may be, clearly there is a long way to go and you may still legitimately ask how do we know a 3 orders of magnitude deficit can be made practical? In truth we don’t know with certainty where it will end up, that is true. However the bet was not made by guessing. There has been lots of investigation and analysis of what kind of implementations may be possible including design review with hardware engineers for that side of things. So essentially it’s designed to outperform the current state of the art, and some high stakes educated projections have been made that it will become practical within a timeframe that still makes AV1 competitive enough to be a worthwhile value proposition.