If you think of it like cloud, where it's a commodity that reaches competitive prices, then you can use it to build products and applications, instead of competing for infrastructure (see also: railroads, optical fiber)

There is tons of money to be made at the application layer, and VCs will start looking at that once the infrastructure layer collapses.

Here's a blog post I wrote about that: https://parsnip.substack.com/p/models-arent-moats

It's a good take. I think both trajectories are occurring simultaneously.

OpenAI challenging Google search is a winner takes all situation, not to mention the vast amounts of user data.

On the other hand, us lesser mortals can leverage AI like a commoditized service to build applications with it.

Not really though. The cloud has some stickiness. It’s pretty hard to move once you’ve settled in. For a lot of AI integrations though it’s just swapping some API endpoints and maybe tweaking the prompting a bit. For probably 95% of AI use cases there almost no barrier to switching.