2025 MID-YEAR LLM MARKET UPDATE: FOUNDATION MODEL LANDSCAPE + ECONOMICS

Summary from the TLDR AI newsletter

Foundation models are shaping the future of computing. Model API spending has more than doubled in six months. Enterprises are increasing production inference rather than just model development, marking a shift from previous years. Code generation has become AI's first breakout use case. While open source continues to advance, Western labs have seen a slowdown in frontier breakthroughs, resulting in enterprise dollars consolidating around a few high-performing, closed-source models.