AI app generation platforms are diversifying rather than competing in a zero-sum manner. The misconception that foundation models are interchangeable has led to incorrect assumptions about market dynamics. Instead of driving prices down, the emergence of unique models has resulted in increased prices and innovations. Claude, Gemini, and Mistral each excel in distinct areas, demonstrating varying strengths in the market. The pattern in AI models mirrors that in image generation, where multiple successful models coexist by serving different creative needs without being judged as strictly better or worse. These trends indicate a thriving, differentiated market.
The platforms emerging in AI app generation aren't locked in zero-sum battles - they're carving out differentiated spaces and coexisting, fostering diversity and innovation.
Many incorrectly assumed foundation models were substitutes for each other, leading to expectations of price competition, but the actual outcome was increased diversity and innovation.
Claude focuses on deep code and creative writing, Gemini excels in multi-modality, while Mistral emphasizes privacy and on-prem deployment, showcasing unique strengths.
The market for AI models continues to expand, demonstrating that prices can increase in a diverse ecosystem, as seen with Grok Heavy and other innovative offerings.
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