He is saying that the "base code" / DNA which makes up the brain might be only 40MB (for example). Not that what eventually emerges from that (such as our memories and learned abilities) can be captured with just 40MB. It's similar to how the Game of Life can be implemented in just a few lines, but very complex behavior can emerge from that. The key is to find a sufficiently simple but general model from which intelligence equal to our own can emerge given sufficient training.