There was a lot of talk about reaching "peak AI" in early summer of this year.

I guess there is some truth to it. The last big improvement to LLMs was reasoning. It gave the existing models additional capabilities (after some re-training).

We've reached the plateau of tiny incremental updates. Like with smartphones. I sometime still use an iPhone 6s. There is no fundamental difference compared to the most current iPhone generation 10 years later. The 6s is still able to perform most of the tasks you need a smartphone to do. The new ones do it much faster, and everything works better, but the changes are not disrupting at all.