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Interview

The AI Economy Is Stabilizing

Y CombinatorJared Friedman
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  • The speaker observes a significant stabilization of the AI economy in 2025, contrasting it with the volatility and uncertainty experienced at the end of 2024.
  • The current market has matured into a distinct three-layer ecosystem comprising model companies, application-layer companies, and infrastructure providers.
  • A relatively standardized playbook has emerged for constructing AI-native companies atop existing model architectures.
  • Economic outcomes across these layers are characterized by broad profitability potential, with no single entity dominating or causing disruptive shifts.
  • Progress has been incremental rather than revolutionary; while model capabilities have improved steadily throughout the year, no major breakthroughs have occurred to destabilize the current trajectory.