Analysis
I think the AI slowdown The Register's Rupert Goodwins just wrote about is real, and I think most of the portfolio conversations I'm having right now are still priced for the version of 2026 where every model release was strictly better than the last one. That stopped being true months ago. Frontier labs are shipping models that have to be kept on tighter guardrails for "uncontrollable" behavior -- Goodwins' phrase, not mine, but it's the right one -- and nobody in the field has actually fixed hallucinations, they've just gotten better at hiding them behind more confident-sounding output.
The tell isn't benchmark scores, which keep climbing because the benchmarks keep getting gamed. It's deployment friction: how many enterprise pilots quietly stall at the "we need a human to check every output anyway" stage, and how long it takes labs to go from announcing a frontier model to actually shipping the API access that makes it useful. That gap has been widening all year, not shrinking, and it's the clearest evidence that "bigger model, better results" stopped being a reliable formula sometime around mid-2026.
“For the labs themselves, slower perceived progress is exactly the environment where capital discipline questions get asked that didn't get asked in 2024 or 2025.”
For founders building on top of frontier APIs, this means the real risk isn't that your model provider gets leapfrogged -- it's that the next model you're counting on to finally fix your reliability problem doesn't, because the problem was never really a capability gap. For the labs themselves, slower perceived progress is exactly the environment where capital discipline questions get asked that didn't get asked in 2024 or 2025.
Room for disagreement: the capex numbers don't show anyone actually slowing down -- Big Tech's 2026 AI infrastructure spend is still tracking toward roughly $500 billion, and OpenAI, Anthropic and Google are all still raising or deploying at a pace that assumes the next model generation justifies it. A genuine slowdown in perceived capability doesn't mean a slowdown in capital commitment, and by the time the spending curve actually bends, several of these companies will already be public and answering to quarterly earnings calls instead of venture boards. That lag is exactly why this is a bet worth having a position on either side of.