Clouded Judgement: Rising Tide, Hidden Risk

The article argues that AI spending is currently in a rapid expansionary phase similar to cloud spending in 2020-2021, with companies over-earning without focusing on ROI optimization; this pattern will eventually reverse when organizations begin optimizing AI costs. Additionally, the author contends that while the "harness" (orchestration layer) around AI models matters significantly, successful AI companies will increasingly develop proprietary models to reduce costs, improve capabilities, and maintain independence from foundation model providers.