Small Specialized Models Are Eating the AI Stack (While Everyone Watches Frontier LLMs)

This story was originally published on HackerNoon at: https://hackernoon.com/small-specialized-models-are-eating-the-ai-stack-while-everyone-watches-frontier-llms.
Everyone's watching the frontier models, but the real work in your AI agent happens in the small stuff. Here's why that's actually good news.
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TL;DR: Small, specialized models—not frontier LLMs—handle most of an agent's work (embedding, reranking, extraction) at ~97% of the quality for a fraction of the cost. The real challenge is serving many small models efficiently, which tools like SIE solve by sharing GPUs instead of dedicating one per model.