What does Foundation model companies risk becoming low-margin backend suppliers, losing application layer competition to

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Foundation model companies risk becoming low-margin backend suppliers, losing application layer competition to startups that treat AI models as interchangeable commodities with no pricing power. Pre-training scaling benefits have slowed significantly Startups swap models mid-release without user impact Open source alternatives erode pricing power dramatically Prioritize fine-tuning over foundation model development

NuggetsAI

NuggetsAI

AI Foundation Models Becoming Commoditized Backend Suppliers