[2604.06217] The End of the Foundation Model Era: Open-Weight Models, Sovereign AI, and Inference as Infrastructure

Computer Science > Computers and Society arXiv:2604.06217 (cs) [Submitted on 18 Mar 2026] Title:The End of the Foundation Model Era: Open-Weight Models, Sovereign AI, and Inference as Infrastructure Authors:Jared James Grogan View a PDF of the paper titled The End of the Foundation Model Era: Open-Weight Models, Sovereign AI, and Inference as Infrastructure, by Jared James Grogan View PDF Abstract:The foundation model era -- roughly 2020 to 2025 -- is over. The forces that defined it have inverted. Open source models have reached frontier performance while inference costs approach zero, exposing what was always structurally true: pre-training large language models at scale is not a durable competitive moat. The US government's formal designation of Anthropic as a supply chain risk in February 2026 accelerated a transition already underway -- but did not cause it. The paper argues that the AI industry is restructuring simultaneously along four axes: economic, as the circular financing structure that inflated foundation model valuations collapses; technical, as the pre-training scaling paradigm gives way to post-training optimization and agentic composition; commercial, as application-layer integrators displace the foundation model companies whose commodity they now consume; and political, as the government asserts its historic role as gatekeeper of strategic technology. These are not separate disruptions. They are one structural shift, arriving together. The paper further a...