Aravind Srinivas:Will Foundation Models Commoditise & Diminishing Returns in Model Performance|E1161

()

The Commoditization of Foundation Models

The biggest beneficiaries of the commoditization of foundation models are the application layer companies.
Verticalization of models is not necessarily the way forward, as general-purpose emerging capabilities are what make these models truly magical.

Current models' reasoning abilities are comparable to a high school student's level.
Future models will iteratively improve their reasoning by generating outputs, seeking feedback, and refining their explanations.
Current models prioritize and discard irrelevant information to manage memory effectively.

OpenAI and Anthropic are the two most likely companies to achieve a breakthrough in bootstrap reasoning.
Large cloud providers will acquire companies like Anthropic and Cohere to add foundation models as complementary features to their existing services.
OpenAI and Anthropic are unlikely to be acquired due to their leverage and the need for their output in the cloud market.
Perplexity is building an Enterprise Pro version with compliance, security, and data governance features to address concerns about data leakage in AI-powered search.
Perplexity's business model focuses on acquiring users through superior product execution and offering great features at amazing prices, rather than relying solely on marketing.
The dominant engine of Perplexity in five years will likely be advertising if they can crack it and become profitable.

The biggest misconception in AI today is short-term thinking and the belief that chatbots are a bubble.
The key to successful AI integration is understanding the existing user intent of an app and tying new features into that intent.
The future of browsers will involve agents working within them, allowing for more productivity and automation.
The hardest element of Arram's role as a startup CEO is dealing with contradictions in decision-making.
In the future, the speaker envisions Perplexity to become the go-to assistant for providing accurate facts and knowledge, regardless of advancements in AI and changes in human agency.