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Most of the cutting edge models are coming from companies with a few dozen to a few hundred people. Stability AI is one example.

Training an AI model, while expensive, is vastly cheaper than most large scale products.

This wave will be nothing like the SaaS wave. Hyper competitive rather than weakly-competitive/margin preserving

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I wrote it from the perspective of a small startup (<10 people, bootstrapped or small funding). I think it's far cheaper and easier to build a nice competitive mobile app/saas than to build a really useful model.

But yes I agree, it will be very competitive with much smaller margins.

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