The business model for GenAI companies is still very unclear. The tech is super interesting and can be quite useful, but this space has turned into an arms race that’s led to mass commoditization of said arms. The tech world benefits from the very interesting advancements of the last few years, but commercially this all seems to be setting up a big train wreck.
I'd argue that the current business model is clear (pay subscription for chat or api) but the valuations are unclear.
If open models continue to keep up and industry as a whole just keeps improving on benchmarks fairly slowly and evenly (a big assumption but what has been happening over past year), then you would assume valuations would eventually drop. Saying that there is still a lot of easy value left on the table (great voice integration etc) and a lot of room for innovations to be incorporated in other industries.
Additionally each foundation LLM provider has a non-zero chance of a large step change in performance. If they can keep the value of this step change it would have huge upsides but this is also hard to reason about (what is the valuation of private companies and the share market if AGI exists - does this even matter anymore).
