Yesterday’s frontier is today’s commodity, so I don't think frontier AI is out of reach. With computing and solar energy costs continuing to drop, the current AI supply shortages are just a temporary blip. We’ll probably land right back in standard boom-and-bust cycles.

But it is not a constant point of "this % of people needs the frontier intelligence".

As thje models get better, the % of the pie gets smaller and smaller. So higher and higher cost of getting frontier model out gets divided onto smaller and smaller customer base as other models catch up

A high margin luxury good with huge r&d costs is a death spiral.

A high per-user r&d means high costs per user. So then users leave to save a buck, qnd the price goes up again for the remaining users.

Maybe it works out OK if you want to signal wealth - the high price is the selling point. But luxury pure utility is a hard sell to consumers, and for luxury B2B it's about high touch sales (e.g. Oracle).

The models will be a commodity, the resources to run the frontier will be the luxury good. This is already the case nearly.

Agreed, but I I wonder what fraction of tasks really require frontier performance, either in terms of sheer difficulty or where speed is a matter of necessity. For many jobs, it's increasingly a question of whether you'd rather have one filet mignon or 20 good cheeseburgers (all from the same cow).

I’m not sure if this counts as a nitpick, but the definition of frontier automatically includes the cheapest models

The market for "frontier intelligence" will be too small to serve outside of certain government/military applications that exist in spite of market forces, in the same way that the market for small, portable nuclear reactors is exclusively limited to submarines and aircraft carriers. When I call a plumber, I don't need a frontier plumber, I just need someone who's baseline competent.

there is definitely an asymptote

Non-frontier intelligence has become a commodity already.

And the success of things like ESP32 shows that good price + good enough is a powerful combination.