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The barbell effect will deprioritize mid-sized models
OpenAI is rumored to be deprecating Terra I will add one more prediction: *They will have to deprioritize/deprecate Luna as well, near to mid term. Just as Haiku is not Anthropic's main priority right now* Reason being the barbell effect. Mid-sized models will not find a use large enough to justify their operational expenses, compared to smaller and slightly less capable models. And the small tier will be taken by the open-weight ecosystem > AI companies will be pushed along the barbell effect: those with consumer demand can aggregate on cheaper models, but those with specific niches will be forced to compete on performance. The ceiling on price is unknown and markets need to be built on new platforms (@natolambert, Where inference-time scaling pushes the market for AI companies, written in Mar 2025 btw) Closed labs will not be able to compete with the ruthless competition coming from all sides for the small-tier models, all the Chinese and American open model vendors cooperating with all the inference providers like @togethercompute @baseten @FireworksAI_HQ @novita_labs and so on