A genuine AI capabilities explosion won't happen just because models can write novel research papers. The bottleneck is the full automation of the R&D loop, which includes a long tail of "messy" real-world tasks like fixing failing GPUs in a data center or managing facility cooling. This physical and logistical grounding is often overlooked.

For vertical AI applications, foundation models are now sufficiently intelligent. The primary challenge is no longer model capability but building the surrounding software infrastructure—tools, UIs, and workflows—that lets models perform useful work reliably and trustworthily.

The primary constraint on AI development is not software or algorithms but the physical infrastructure required to support it: power, data centers, and supply chains. Policy will focus on this area regardless of election outcomes, though the specific approach may differ.

Large Language Models are limited because they lack an understanding of the physical world. The next evolution is 'World Models'—AI trained on real-world sensory data to understand physics, space, and context. This is the foundational technology required to unlock physical AI like advanced robotics.

Performance comes from a "harness" surrounding the AI model, which includes curated data, tools, and rich context. This harness, which can be open and multi-model, is where the hard work lies—prepping the context layer so that a model's plan can execute efficiently.

While data was once a major constraint for training AI, models can now effectively create their own synthetic data. This has shifted the critical choke points in the AI supply chain to physical infrastructure like power grids and data center construction, which are now the primary limiters of growth.

The evolution from simple voice assistants to 'omni intelligence' marks a critical shift where AI not only understands commands but can also take direct action through connected software and hardware. This capability, seen in new smart home and automotive applications, will embed intelligent automation into our physical environments.

The focus in AI has shifted from crafting the perfect prompt (prompt engineering) to providing the right information (context engineering), and now to building the entire operational environment—tooling, systems, and access—that enables a model to perform complex tasks. This new paradigm is called harness engineering.

Traditional, static benchmarks for AI models go stale almost immediately. The superior approach is creating dynamic benchmarks that update constantly based on real-world usage and user preferences, which can then be turned into products themselves, like an auto-routing API.