Cheap just-below-frontier models leave room for distributed serving networks

Ronangmi · x · 2026-07-22

A screenshot quotes Kavin Ethayarajh arguing that the original point is too narrow: there is substantial demand for just-below-frontier models where buyers mainly optimize for $/1M tokens.

His view is that it may be most capital-efficient for frontier providers to serve only a few high-margin models, which leaves room for smaller, slightly less capable models along the cost frontier—and for distributed networks that can serve them cheaply.

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