Two years into the Generative AI revolution, research is progressing the field from “thinking fast”—rapid-fire pre-trained responses—to “thinking slow”— reasoning at inference time. This evolution is unlocking a new cohort of agentic applications. 

On the second anniversary of our essay “Generative AI: A Creative New World,” the AI ecosystem looks very different, and we have some predictions for what’s on the horizon.

The foundation layer of the Generative AI market is stabilizing in an equilibrium with a key set of scaled players and alliances, including Microsoft/OpenAI, AWS/Anthropic, Meta and Google/DeepMind. Only scaled players with economic engines and access to vast sums of capital remain in play. While the fight is far from over (and keeps escalating in a game-theoretic fashion), the market structure itself is solidifying, and it’s clear that we will have increasingly cheap and plentiful next-token predictions.

As the LLM market structure stabilizes, the next frontier is now emerging. The focus is shifting to the development and scaling of the reasoning layer, where “System 2” thinking takes precedence. Inspired by models like AlphaGo, this layer aims to endow AI systems with deliberate reasoning, problem-solving and cognitive operations at inference time that go beyond rapid pattern matching. And new cognitive architectures and user interfaces are shaping how these reasoning capabilities are delivered to and interact with users.