industrial diamonds era of AI models
Long before synthetic diamonds were ready to adorn people’s bodies, there were profitable scaled businesses selling industrial diamonds; for drill bits and the like.
We’re entering the ‘industrial diamonds’ phase of AI models, as companies scale up usage and start paying attention to unit economics. The manufacturers will keep selling investors and the general public on the wondrous beauties yet to come. But what will really move off the shelves will be high volume low margin product.
Unlike diamonds, LLM calls come from open source models too, you don’t need an external manufacturer as such. So I expect much of the volume growth to be in self hosted and fine tuned little industrial models. They’re not pretty, but they make your drills work better.