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I was very bearish on AI to begin with, but recently I started experimenting more with APIs and building my own agents. And wow, I did not realize how heavily subsidized all the subscriptions were: 🧵 1/6

There's an entire industry of model and agent optimization that hasn't been explored yet. Besides the fact that model distillation is packing more capabilities into smaller models (e.g. tiny on-device models bring as good as the largest previous generation), there's routing, text diffusion, caching

This was addressed in post 6 of the 6 post thread where I talk about "handwavy napkin math that makes AI becomes basically free"

Yes, post 6 is just as handwavy though. There's real evidence of breakthroughs with Deepseek, Gemini Nano, etc. To claim that there's nothing left to be done in optimization isn't very convincing. The companies who focus on innovating in that area will outcompete the others.

It's not a "suggestion", it's standard practice. That's literally how you train models to be more optimized.

And who pays to trains the larger model that they train the smaller model with?

if distillation didn't have a element of free riding, Deepseek wouldn't have been so ansty about saying they'd done it