One chart that's getting a lot of attention right now for understanding where we are in the AI economy:
The model layer is commoditizing fast. Non-frontier models are everywhere for everyday tasks, while frontier models are in a brutal dogfight at the top. Margins compressing, differentiation narrowing.
Meanwhile, the compute layer is seeing explosive demand growth across the board—doesn't matter who's buying or what they're building. Chips, infrastructure, data centers: all seeing structural tailwinds.
If you're positioning for AI plays, this split matters. Model providers face a tougher margin story. Compute and infrastructure? That's where the durable economics are stacking up. Classic picks-and-shovels setup in a gold rush.
The model layer is commoditizing fast. Non-frontier models are everywhere for everyday tasks, while frontier models are in a brutal dogfight at the top. Margins compressing, differentiation narrowing.
Meanwhile, the compute layer is seeing explosive demand growth across the board—doesn't matter who's buying or what they're building. Chips, infrastructure, data centers: all seeing structural tailwinds.
If you're positioning for AI plays, this split matters. Model providers face a tougher margin story. Compute and infrastructure? That's where the durable economics are stacking up. Classic picks-and-shovels setup in a gold rush.