AI BriefingThe Economics of the Intelligence Frontier
Key point
The value of AI models varies according to the intelligence required for each task, with excessive intelligence leading to inefficiency.
Details
Frontier model companies such as OpenAI, Anthropic, and Google are likely to grow into massive enterprises despite the commoditization strategies of late entrants like DeepSeek and Qwen. This is because the AI market is not a single market, as the level of Intelligence required differs for each task.
For a specific task, a model's intelligence has two thresholds: Minimum Viable Intelligence (MVI) and Maximum Necessary Intelligence (MNI). Below MVI, the task cannot be performed; between MVI and MNI, economic value increases as intelligence increases. However, beyond MNI, additional intelligence no longer creates value.
Applying frontier-grade reasoning models to simple tasks can waste time and cost due to Overthinking. This follows the same principle as inefficiency arising from assigning overly intelligent personnel to simple tasks. Therefore, the selection of an AI model should consider an appropriate level of intelligence suited to the difficulty of the task.
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