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Intelligence is a commodity. Context is the real AI Moat
71–80 of 114 posts
Re: Intelligence is a commodity. Context is the real AI Moat
#72In a way, isn't this the same old data moat that always existed in AI/ML, but supercharged? Generalist models can now reason over proprietary data as context instead of requiring you to train narrow expert models on it. What changed is you no longer need an ML team to turn that data into value.
Re: Intelligence is a commodity. Context is the real AI Moat
#73As much as I use AI in daily workflows, I do not think an AI-first society will ever be a thing. Historically there is no evidence of that happening with tech revolutions - or rather perhaps you could say to some extent - you can not say that we are an internet-first society, or cars-first society or mobile phone - first society despite these being profound technological revolutions. And more importantly, the only sc…
People could not imagine how the PC was going to be a dominant computing paradigm until it was. I think I would argue in the direction that "this seems less likely". But I have been in this game almost 30 years. Anything goes. Also America looks "car first" empirically speaking from where I sit. The thing I am asking is if AI alters the collective human survival loop enough. Cars absolutely did. If people collectively can use AI to create a survival benefit they will. If enough people do this it starts looking more and more like an essential thing and not separable from the societies survival. So maybe it is the framing of "x-first" it is more like "x-dependent" perhaps? And what is a survival benefit? Just ask your brain why we go to work every week :)
Re: Intelligence is a commodity. Context is the real AI Moat
#74API prices dropped 97% in two years so the model layer is already a commodity. The question is which context layer actually sticks. The OpenClaw example in the article (400K lines to 4K) is a nice proof point for what happens when context replaces code. I've been arguing for some time now that it's the "organizational world model," the accumulated process knowledge unique to each company that's genuinely hard to repl…
Hi Phil,
Your article is great! As someone who's working in this space, your points just improved our presentation and selling a lot. We have been talking with C level finance executives about building semantic layers, and i can confidently say that the way you presented the value proposition of the context layer is going to improve our conversion rates.
Thank you so much! This is one of the best analysis i have ever heard about the subject.
Re: Intelligence is a commodity. Context is the real AI Moat
#75Earlier quoted context omitted.
>- 'Automation will lead to immediate devaluation of human labor that is routine. Society needs to decouple a person's "worth" from their "utility as a tool".' I have this vision that in absence of the ability for people to form social hierarchies on the back of their economic value to society, there will be this AI fueled class hierarchy of people's general social ability. So rather than money determining your neigh…
If we have post scarcity due to AI, everything becomes so uncertain. Why would we still have violent and crazy people? Surely the ASI could figure it out and fix whatever is going on in their brains. It's so fuzzy after that event horizon I have no confidence in any predictions.
Why are some people able to bear suffering whereas others go bonkers? Or what if the only source of happiness of some of those crazy people is domination of other people and exclusivity of social hierarchies? How would AI fix that?
Re: Intelligence is a commodity. Context is the real AI Moat
#76One thing that seems to be missing in most discussions about "context" is infrastructure. The dream system for AI agents is probably something like a curated data hub: a place where datasets are continuously ingested, cleaned, structured and documented, so agents can query it to obtain reliable context. Right now most agents spend a lot of effort stitching context together from random APIs, web scraping, PDFs, etc. T…
Am working on making this layer currently. It’s a more interesting problem even when you remove AI agents from the picture, I feel a context layer can be equally as useful for humans and deterministic programs. I view it as a data structure sitting on top of your entire domain and this data structure’s query interface plus some basic tools should be enough to bootstrap non trivial agents imo. I think the data structure that is best suited for this problem is a graph and the different types of data represented as graphs.
Stitching api calls is analogous to representing relationships between entities and that’s ultimately why I think graph databases have a chance in this space. As any domain grows, the relationships usually grow at a higher rate than the nodes so you want a query language that is optimal for traveling relationships between things. This is where a pattern matching approach provided by ISO GQL inspired by Cypher is more token efficient compared to SQL. The problem is that our foundation models have seen way way way more SQL so there is a training gap, but I would bet if the training data was equally abundant we’d see better performance on Cypher vs SQL.
I know there is GraphRAG and hybrid approaches involving vector embeddings and graph embeddings, but maybe we also need to reduce API calls down to semantic graph queries on their respective domains so we just have one giant graph we can scavenge for context.
Re: Intelligence is a commodity. Context is the real AI Moat
#77I know this is not the explicit meaning, but lol, intelligence isn't a commodity among humans, let alone LLMs
Re: Intelligence is a commodity. Context is the real AI Moat
#78My observation is that nobody knows how to deploy these LLMs yet. So yes. Context is everything.
OpenAI is still selling model access not new science or new discoveries. They are pushing the context problem to the masses hoping someone might find a useful application of the technology.
Re: Intelligence is a commodity. Context is the real AI Moat
#79API prices dropped 97% in two years so the model layer is already a commodity. The question is which context layer actually sticks. The OpenClaw example in the article (400K lines to 4K) is a nice proof point for what happens when context replaces code. I've been arguing for some time now that it's the "organizational world model," the accumulated process knowledge unique to each company that's genuinely hard to repl…
Hi Phil, Your article is great! As someone who's working in this space, your points just improved our presentation and selling a lot. We have been talking with C level finance executives about building semantic layers, and i can confidently say that the way you presented the value proposition of the context layer is going to improve our conversion rates. Thank you so much! This is one of the best analysis i have ever…
wow, that's so cool, happy to help!! Thanks for letting me know and thanks for subscribing :)
Re: Intelligence is a commodity. Context is the real AI Moat
#80Intelligence is rarer than ever