Beyond the Models: Where Investors Are Finding AI’s Next Wave
NOBODY TALKING: Everyone is chasing frontier models. Here's where $billions in AI value are still hiding.
Why it matters
As frontier model and infrastructure funding becomes saturated, institutional investors are shifting focus to defensible moats in physical AI, vertical orchestration layers, and enterprise embeddedness—signaling a maturation of AI investment strategy away from pure capability races.
The key facts
8 to knowCursor received $60B acquisition option from SpaceX, signaling consolidation in vertical AI
Investor thesis: defensibility = entrenchment + replicability + trust
Physical AI identified as most important trend over next 4 years by PwC TMT deals leader
BrightAI example: hardware-based moat harder to replicate than software; captures unique infrastructure datasets
Vertical AI differentiation eroding as frontier models become commoditized
Frontera Health (autism-focused LLM) exception: HIPAA-compliant data defensibility where large labs won't compete
Software not dead: regulated, mission-critical workflows with high switching costs remain defensible
AI agent-native software platforms may become more valuable as primary users shift from humans to agents
Go to the source
The Informationtheinformation.com
Publisher excerpt: Getting in on the ground floor of the next AI wave can feel particularly elusive for investors. With billions continuing to pour into frontier models and the infrastructure powering them, much of that opportunity is already spoken for. For investors looking beyond hyperscalers and data centers, the…