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20VC: Perplexity's Aravind Srinivas on Will Foundation Models Commoditise, Diminishing Returns in Model Performance, OpenAI vs Anthropic: Who Wins & Why the Next Breakthrough in Model Performance will be in Reasoning
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
Exploring the Benefits and Challenges of Model Commoditization for Application Layer Companies
Model commoditization benefits application layer companies as it lowers the price of models, enabling companies to offer a premium product experience to users. This allows companies to leverage commoditized models and sell them at a higher value, creating a significant business advantage. Building a successful company in this context requires a strategic blend of design, product, AI, and search. The fundraising process for companies in this space is challenging, as investors demand rigorous diligence and insights into future strategy, particularly regarding building and owning models, search indices, and enterprise sales capabilities. Demonstrating a strong execution track record can provide a competitive edge during fundraising.
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