Martin Casado on Where the Value Is Going in AI

AI is fundamentally transforming the economics of company building, enabling small, agile teams to deploy massive amounts of capital into productive growth and capability. Unlike previous technology cycles, where large capital injections often led to organizational bloat, modern AI development allows for the direct conversion of capital into usage and market expansion. Investors should prioritize identifying strategic control points within the new stack rather than fixating on traditional financial metrics like margins or churn. While frontier labs currently capture significant value due to compute and data advantages, the market is expected to fragment as supply constraints ease. Critical infrastructure, such as model routers and specialized development tools like Cursor, represents the next wave of value accrual, as these entities function as essential two-sided marketplaces and strategic assets in an increasingly AI-integrated economy.