$BIDU-SW(09888)$ $Baidu(BIDU)$ It's slowly becoming clear that @AndrewYNg $BIDU was the right model to follow.
Cost of using AI models has collapsed according to JP Morgan.
While this is good for the diffusion of the technology, it doesn’t bode well for the foundational model providers as it signals commoditization.
Remaining margins will be competed away once the model development flatlines.
Value creation will shift to the application layer, and big AI labs supplying foundational models will be more like internet service providers.
The technology itself will get occasional upgrades (like we had in telecom with 3G, 4G, 5G) but it won’t be exclusive to any model provider so it’ll remain as a commodity.
I think their faith will be parallel to internet service providers. They’ll make massive investments and really change the world, but they won’t see high return on investment as their product will have already become a commodity when they decide to harvest.
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