It will be interesting to see how inelastic the demand for frontier tokens is.
...alternatives are largely good enough for most workloads. This is one reason why model providers are desperately trying to move to harnesses that store state.
Topic: model provider
30 chunks · 21 episodes
1.9x burst in 2025 Q2
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Peak quarter intensity across the topic's active span. Higher values mean attention was concentrated into a shorter stretch rather than spread evenly over time.
Topic summary
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A short read on the topic's time range, peak episode, and strongest associations. Use it as the quick orientation before drilling into examples.
- model provider appears in 30 chunks across 21 episodes, from 2024-07-15 to 2026-06-01.
- Its densest episode is Bits and Bobs 5/19/25 (2025-05-19), with 4 observations on this topic.
- Semantically it travels with llm model, model quality, and OpenAI, while by chunk count it sits between background noise and status quo; its yearly rank moved from #61 in 2024 to #58 in 2026.
Over time
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Observations
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My friend Soren has an interesting piece on the price elasticity for models.
...s, which requires leaving money on the table for the fat tails. Two options for model providers: 1) Move to a sales-gated API for all uses. This would allow detecting the fat-tail use and bucketing them into the higher margin buckets based on u...
Whenever model providers complain about others distilling their models, I think about the Project Panama images.
Whenever model providers complain about others distilling their models, I think about the Project Panama images. A warehouse full of books deliberately destroyed by the inge...
The fundamental realities of KVCaches dominate what kinds of UXes are viable.
... minutes to closer to 5 minutes to get more efficiency. If you want to cost the model provider a ton, send a single question about 5 minutes after the last one finished, to stay permanently in the cache.
If your tool can solve disease you don't monetize via the API but via vertical integration.
...elected for. If vertical integration is selected for, it's conceivable that the model providers stop giving access to the models for the frontier models. Mythos appears to be going that way. Conveniently, they can tell a story of national secur...
A situation good for society is "all of the model providers have to compete and none of them win" for LLMs.
A situation good for society is "all of the model providers have to compete and none of them win" for LLMs. Great for everyone but the LLM model providers, who are in a never-ending red ocean battle. But the ...
The model providers seem to be in a meta-stable equilibrium.
The model providers seem to be in a meta-stable equilibrium. None of them have any differential pricing power, since the models are practically commodity. But they do a...
The LLM model providers are like electricity providers back when electricity was new.
The LLM model providers are like electricity providers back when electricity was new. Competing to get better quality for cheaper. Innovating on new techniques to do so. Bu...
Stuart Russell claims that the CEOs of AI labs are in a red queen race they want to stop but can't.
...'t. They are bound by their fiduciary duty to continue pushing, since the other model providers are too. One apparently told him that they were hoping for a Chernobyl style disaster that would get governments to step in and stop the competition...
I continue to think the best business parallel for LLM model providers is cell phone networks.
I continue to think the best business parallel for LLM model providers is cell phone networks. Extremely capital intensive to build out, but then much lower marginal cost to operate. Though inference has much more margi...
Tying models to UX from that model provider is dangerous.
Tying models to UX from that model provider is dangerous. If the models are tied to the UX from the vertical integration, users get stuck to a single model. That requires that one model to be "...
If the interface people use is centralized, that's the power that leads to aggregators.
...y way users interact with models is not via a UX owned by one of the foundation model providers.
The center of gravity in this era is not the models, it's the context.
...dels of generally competitive quality and lightly differentiated abilities. The model provider should not also own the context layer. That's like the cell carrier trying to dictate you can only use their super-app on your phone.
It's not correct to say large language models are "commoditizing."
...e race between a non-trivial number of powerful LLMs, which prevents any of the model providers from trying to flex their muscle too much.
Which will win, the vertically integrated tool or the tool that can use any model?
...t consumers have a subscription to that then allows them to use any of the main model providers with their context and not get stuck with any of them. But it's unclear which of those offerings will be the schelling point that starts getting com...
The equilibrium of the best LLM models being available via API seems meta-stable to me.
...heir API before ChatGPT got big. Because they set that precedent, the other top model providers also added a public API. Now, if any one of the providers got rid of their API, their competitors would push forward and scoop up the market share. ...
LLM model quality seems to be reaching an asymptote.
...models after multiple conversation turns now. This is good for everyone but the model providers; no individual model provider will have undue power by default, because there are multiple options in the same ballpark. Similar competitive dynamic...
As model quality hits its asymptote, the quality and relevance of the available context will matter much more for differentiation than the underlying model quality.
...ion between the layers. The application layer and model layer will collide. The model providers will push hard to have their vertically integrated app used instead of the public API.
It's critical that the model and your context are at different layers.
...main UI you use–the one that stores your context/memories–to also be one of the model providers.
OpenAI's new responses API is stateful and also offers good enough default integrated tools you can use...
...f features, because now users can get them for free… if they just commit to one model provider. It's OpenAI trying to change the game from stateless, easy-to-swap LLM providers, where the only competition is on quality and cost of the model, an...