Foundation Model Valuations Near $1 Trillion But History Says Infrastructure Builders Rarely Win
Foundation model valuations are approaching $1 trillion, with Anthropic and OpenAI leading this surge. However, historical parallels suggest that infrastructure providers, like early internet backbone builders, may not capture the ultimate value. As AI capabilities become commoditized and open-weight models close the performance gap, the focus is shifting from model performance to application-layer value and lock-in. AI
IMPACT Foundation labs face margin compression as AI capabilities commoditize, shifting value capture to application layers and developer ecosystems.