Why Building an AI Model Now Costs $1 Billion

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September 25, 2025
Join 40,000 readers and get the full notes and summary: https://newsletter.aiwithkyle.com/subscribe Subscribe and turn on notifications to catch the next live stream: https://www.youtube.com/@iamkylebalmer?sub_confirmation=1 Want to become fast-track becoming an AI Trainer? Apply to join the next AI Workshop Kit cohort: https://newsletter.aiwithkyle.com/c/workshop-kit This video is from the ‘AI with Kyle News and Updates Live Stream’ First aired: 24 September 2025 Watch full edited live stream: https://youtu.be/kAgTFYvCcgo —— More Useful Resources —— My other daily live show - 30-day building a business in public challenge: https://www.youtube.com/live/Z0Z_1Eg3HUk (day one) Free AI Entrepreneurship Playbooks: https://aiwithkyle.com/catalog Free Quiz: What AI business should you start? https://aiwithkyle.com/tools Free AI Training Business Planner: https://aiwithkyle.com/tools/workshop-builder Free 10-Week ‘Vibe Coding’ AI Summer Camp: https://aiwithkyle.com/courses/10-week-ai-summer-camp —— Contact —— Best is in YouTube comments. For business enquiries only: https://www.passionfroot.me/iamkylebalmer Building a competitive AI foundation model now costs hundreds of millions to over $1 billion when you factor in compute, engineering, and infrastructure. Microsoft's new foundation model ranked 25th on benchmarks - way behind ChatGPT, Claude, and even smaller players like DeepSeek. The barrier to entry is so high that we're down to fewer than 10 real competitors, and it's getting nearly impossible for new companies to break in.