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Today we’re trying something new. We’re sharing a slide deck, “Intelligence is the Primitive. Applications are the Diffusion Layer” by Anish A, that he originally put together for a smaller audience. There’s a lot of great stuff that gets made internally at a16z, and we look forward to sharing more of it here on a regular basis, when we’re able. - Danco
Overview: what is the overall situation?
Apps & the Application Layer
Consumer
Thank you for reading! If people like them, we’ll publish these on a regular basis.
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I dislike slide decks. Generally lots of fancy diagrams, bullet points, circles, arrows, garish colors and if we are lucky, a conclusion slide.
I used chatGPT to summarize the deck into something that consolidates all the information and ideas presented and makes more sense for me. Perhaps helpful for others also. I suggest that it would be good to include such a summary (or a button to generate such a summary) in future such decks. Thanks.
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From chatGPT:
"The deck’s core argument is that AI intelligence is becoming a commodity-like primitive, while applications are the layer that distributes that intelligence into the economy. As models get dramatically better and cheaper, the durable advantage for AI companies shifts away from simply having a better model and toward figuring out how to package that intelligence into products people will actually use and pay for. The interesting question is therefore less “who has the smartest model?” and more “what new products become possible as intelligence gets cheaper and more capable?”
For startups, this creates both a huge opportunity and a warning. Applications can capture value by embedding model capabilities deeply into specific workflows, industries, and consumer experiences—but generic AI features are likely to converge quickly as the underlying models improve. The winners will be products that turn continual model improvements into tangible customer value, with differentiated distribution, workflow integration, proprietary context/data, or a uniquely compelling user experience. In that sense, models provide the raw intelligence, while applications are the “diffusion layer” that determines where that intelligence actually gets deployed and monetized."
Amazing read, minds brimming with ideas