The Model *Is* the Product: The Next Frontier in AI Investment
Speculation abounds on the next AI wave. The author argues the answer is clear: the model itself is the product. Generalist scaling is slowing, opinionated training surpasses expectations, and inference costs are plummeting. This forces model providers up the value chain, while application layers face automation and disruption. OpenAI's DeepResearch and Anthropic's Claude 3.7 exemplify this: not merely LLMs or chatbots, but models designed for specific tasks. This signals a new AI phase: model trainers dominate, application developers face displacement. Investment in application layers may fail, as model training holds true value. Future AI success lies with companies capable of model training, possessing cross-functional teams and intense focus.