2026-08-26XQuote

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Interesting development. The latest models are also the most expensive. One can see a long J curve building, then, to get to positive ROI for these models if folks don’t want to pay for the latest/greatest. On top of that, if most enterprises are realizing that previous classes of models can do the job well, then the next obvious step will be to evaluate open source models which are equivalent but may be much cheaper. 🤔

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This is the most important chart in AI right now because it shows where AI spending is actually going by model capability. Of Anthropic’s models, Fable (dark blue bottom) is only 11% of revenue. Very few companies want to pay for the best model. The majority of spending is going towards Opus 4.8/5. This means most businesses want very strong models but don’t feel it’s worth paying for the best models. Opus 4.8/5 is basically the performance of Chinese open-source models like Kimi K3 and GLM-5.3. But the Chinese models are cheaper to use. This means there’s likely very strong underlying demand for Chinese open-source models, but it takes time for US businesses to make the shift and some are worried about regulatory or other risks. Overall, there’s a big capabilities overhang in AI that makes it harder to justify massive investment in ever more powerful models from a sheer commercial standpoint. Businesses are still just trying to find interesting ways to use AI in general, much less push the limit with absolute frontier models. Chart source: https://t.co/AenJp1UdqB
kyleichan ↗