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AI's Three-Body Problem: no single force can dictate the outcome
Two celestial bodies orbiting each other trace stable, predictable paths. Add a third, and the system turns chaotic: each body is large enough to bend the others’ paths, and a small nudge by one can swing the trajectory of all three. That is how I have come to see the AI economy in 2026 — as three bodies pulling on one another: the closed-source frontier labs, led by OpenAI and Anthropic; open-weight models, mostly out of China; and the application companies built on top of both. Each is powerful enough to reshape the others’ orbit, but none can dictate where the system finally settles.
TL;DR
- The AI economy is a three-body system comprising frontier labs, open-weight models, and application companies, with each powerful enough to influence the others.
- Frontier labs are experiencing high demand and revenue growth, but also facing criticism for pricing and competition from new models.
- Open-weight models, particularly from China, are becoming highly competitive with frontier models at a lower cost, while US open-weight models are also emerging as alternatives.
- Application companies are increasingly building on open-weight models for cost and control benefits.
- Future trends include easing pricing discomfort due to competition and demonstrated ROI, a continued shift towards a multi-model environment, and the growing viability of US open-weight models.
- There will be a convergence of players, with frontier labs moving deeper into the product stack and application companies into the model stack.
- The ultimate question is not if AI will pay off, but who will capture the value: the labs, the open models, or the applications.