The evolution of AI foundation model companies bears some resemblance to that of blockchain companies. I initially thought it would be a Fat Protocol scenario, but then “anyone can create blockchain” and “low gas fees for better UX accelerated adoption,” so while usage grew, monetization never followed. Instead, value emerged on top—in the applications themselves, and even in the wallets connecting to those applications. The same is true for AI foundation model companies: “not exactly ‘anyone can do it,’ but no absolute monopoly or oligopoly either”—and now, with the emergence of incredibly cheap open models, they’re caught in a price war, so increased usage doesn’t translate to higher revenue. Instead, value is shifting to the applications built on top of these models, and services that aggregate multiple models are becoming stronger.