End of the Foundation Model Competition: Artificial World Needs a Validation Layer

For half a decade, the world of AI revolved around a single race: who could build the biggest, smartest, and most general foundation model. It was a battle fought with billions of dollars, GPU clusters the size of small nations, and an obsession with benchmark dominance. But as the dust settles, it is becoming clear that this competition is ending not because anyone has truly won, but because the game itself has changed.

1. The Age of the Model Arms Race

In the early 2020s, AI progress was defined by scaling. The mantra was simple: more data, more parameters, more GPUs. OpenAI, Anthropic, Google, and a few others poured vast sums into foundation models that grew from billions to trillions of parameters. The field of competition was limited to companies that could spend over a billion dollars on computing resources, data, and talent. While the public narrative focused on rivalry, in practice, these models began to converge in architecture, language, and behavior.

2. The Rise of Vertical Intelligence

The next wave of value creation will come from specialized and deeply vertical intelligence, AI that understands a domain with surgical precision rather than encyclopedic breadth. Whether it is medical diagnostics, financial risk, or brand safety in video content, the competitive frontier has shifted from foundation to application infrastructure.

3. The Post Model Era

In this new phase, the differentiator is not who trains the biggest model but who can orchestrate intelligence. Companies that combine reasoning, retrieval, and domain specific data pipelines will outperform those who merely scale compute. The foundation layer will become infrastructure, much like electricity. No startup can compete by building a power plant anymore.

4. What Choices Do We Have

Since 2021, PYLER has built a purpose-built multimodal video understanding model for UGC (User Generated Content) validation and retrieval for brands. To transform from a surviving company into a thriving one, we faced two choices:

1. Create more B2B AI Agents, which could generate explosive short term revenue.

2. Build a validation layer for Gen AI applications.

   
   

We chose the second path. We believe it is the only way to solve a foundational problem that the world will soon suffer from. The first path, creating more B2B AI Agents for quick revenue, will inevitably be dominated and replaced by companies like OpenAI, Google, and Anthropic.
Consider the OS and Cloud eras. Operating systems had defenders and cloud companies had security protocols, yet Okta, Wiz, and PaloAlto Networks built billion dollar businesses by providing third party validation for enterprises and nations.
Problems caused by humans can be solved by human capabilities. But the problems that will be caused by AI are an entirely different agenda.

5. The Validation Layer Imperative

Just like the OS and Platform eras, third party validation will be essential. The core value of Gen AI applications is generating outputs that meet a user's intention and provide satisfaction. However, if these applications validate themselves too aggressively, it can weaken their core generative competence.
At the same time, enterprises and nations cannot validate all AI outputs using only their internal capabilities. There is a critical lack of infrastructure level third party validators to secure their interests and safety. This is the modern equivalent of the seat belt in the automotive era.

In closing…

The end of the foundation model competition does not mean the entire competition is over. It simply means the participants in that specific race have been decided. The new winners of the next AI era will not be those who built the model, but those who understand how to build the validation layers that protect human profit, rights, and safety.

As steam once symbolized the dawn of the Industrial Revolution, code and data now mark the rise of the AI Revolution. But every revolution needs its validation layer — the mechanism that keeps progress aligned with trust and safety. (Painting – The Gare Saint-Lazare, Claude Monet (1877))

Jaeho Oh is the co-founder and CEO of PYLER.