Andreessen: AI market will split into supercomputers and small embedded models
Marc Andreessen · Marc Andreessen's 2026 Outlook: AI Timelines, US vs. China, and The Price of AI · Jan 7, 2026 · at 19:04
Marc Andreessen, co-founder of Andreessen Horowitz, outlines his market structure thesis on how centralized AI supercomputers and localized small models will divide usage.
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“I tend to think the AI industry is going to be structured a lot like the computer industry ended up getting structured, which is you're going to have a small handful of basically the equivalent of supercomputers, which are these like giant, you know, kind of we call God models that are, you know, running in these giant data centers. And then, you know, I, I'm not like convinced on this, but my kind of working assumption is what happens is then you have this cascade down of smaller models All, ultimately, all the way, the very small models that run on embedded systems, right, run on individual chips inside every, you know, physical item in the world. And that, you know, the smartest models will always be at the top, but the volume of models will actually be the smaller models that proliferate out.”
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