ELPA Analysis
The gold rush for base model startups is slowing. Investors have realized that training massive models requires billions in capital, with low profit margins due to intense competition and rapid depreciation of older models.
Instead, venture capital is flowing toward the infrastructure and middleware layers. Startups focused on energy management, model routing, database indexing, and hardware optimization represent more capital-efficient investments with clear business models.
This funding shift is forcing base model developers to partner with cloud titans for survival, while the surrounding software ecosystem matures, creating a sustainable foundation for application development.
