A frontier lab's strategy should follow from the competitive landscape: with one or two dominant players, sell models at a high markup; with several tied labs, sell products; and with a narrow lead like OpenAI's and Anthropic's today, pull up the ladder and build products competitors cannot match with older tech.

How you play this as a frontier AI lab is almost a simple calculation: If there are one or two players with the best models and a long lead over the competition, the best approach is to sell those AI models at a high markup and bank the margins. If there are several labs essentially tied, the strategy is to sell the best AI products built on top of the models. If you have a relatively narrow lead over the competition, as is the case with OpenAI and Anthropic today, then things get interesting. The best move may be to pull up the ladder and use your very best models to build products that your competitors cannot with previous-generation tech, especially if you're inevitably headed to a product battle anyway.

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