In 1849, the merchants who sold picks and shovels outlasted almost every prospector who swung them. The AI boom is replaying that script with eerie fidelity, and yet most investors are still staring at the shiniest layer of the stack: the models themselves.
Model companies capture headlines, but headlines are not margins. Training frontier models is a capital furnace, each generation costs an order of magnitude more than the last, while open-source alternatives compress pricing power from below. It is a brutal place to build a moat.
