We are already seeing diminishing returns on state of the art models as training becomes more expensive for smaller relative improvements. For AI companies, attempting the next generational leap becomes an increasingly risky bet, but missing the next generational leap would mean bankruptcy.
In the rest of the tech world, attention and investment will continue to move towards tools build on top of AI models, probably with coding agents as the initial and main focus. AI is a foundational technology, but we are still figuring out what we will build on that foundation.