AI has reached the point of diminishing returns. Here's what comes next

OpenAI's GPT-5 is in trouble.

Claude's new model is 4x more expensive, and it isn't much better.

It seems like all big, multi-billion-dollar companies are struggling to build more advanced AI.

We've reached the point of diminishing returns.

More use-cases > better AI

It seems like OpenAI/Claude/Google have all stopped talking about building better AI models. Instead, they've switched to finding more use-cases for their existing AI models.

In the past month or so, all of the companies I've mentioned below have released (or rumoured) their own version of AI agents:

• Claude has an AI agent that can do things on your computer

• OpenAI now has an agent that can read code from your computer

• Google has "accidentally" leaked an AI agent for Chrome

Where things are going

The general pattern behind all of these announcements is to make it easier to get context for your prompts & replace the actions you'll take after you get your answers from the AI LLMs.

Let me explain:

• Get context for your prompts: OpenAI's tighter integration with code editors is one example of this.

• Automate the actions you'll take after you get your answers: Say you use ChatGPT (with Web enabled) to find the cheapest flights from your location to New York. The next step is go to a website and book your flight. AI agents are trying to do this.

No signs of vertical/niche competition

OpenAI/Claude make a big chunk of their revenue from providing an API.

So it makes sense for both of those companies to not compete "vertically" with others i.e. release a product that solves a particular use case, i.e. booking flights.

Google, on the other hand, doesn't have such an incentive (they make most of their money from ads), so if there's a vertical product in the near future, it'll probably come from Google.

At the present moment, it seems like all major companies are focusing on getting context for your prompts and automating the actions you'll take after you get the prompt's results. The product is not competing & emphasising any "niche" benefit, which could put OpenAI/Claude in direct competition with the companies that use their API.