Packy McCormick analyzes the rise of Vertical Integrators—companies that combine multiple proven technologies into integrated systems—as the dominant business model of the Techno-Industrial era, contrasting them with Legacy Industrials and Deep Tech startups. The essay uses Base Power Company's battery pack integration strategy as a concrete example of how system-level design choices (rather than individual component breakthroughs) create competitive advantages.
Analysis of AI cost economics and token compression impacts, arguing that subsidized AI pricing masks unsustainable burn rates and that efficiency improvements could trigger a demand surge with significant market consolidation effects.
This article argues that enterprise AI costs are skyrocketing despite per-token pricing declining 10x every 18 months, because companies reinvest savings into more powerful models and broader deployments. It contends that current LLM provider pricing is unsustainably subsidized and will eventually rise sharply, making token compression and intelligent model routing essential optimization strategies for enterprises to build before repricing occurs.