The Five Scaling Phases of AI
This Week In Business AI [Week #8-2026]
The story of modern AI isn’t a straight line of “bigger models = better results.” It’s a sequence of paradigm shifts, each one redefining where compute creates capability.
Understanding these phases isn’t academic — it’s the structural map that explains why 2025’s models weren’t dramatically larger than 2023’s, yet reasoned dramatically better.
And why RLVR — the fifth phase — represents the most consequential training breakthrough since pretraining itself.
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The weekly newsletter is in the spirit of what it means to be a Business Engineer:
We always want to ask three core questions:
What’s the shape of the underlying technology that connects the value prop to its product?
What’s the shape of the underlying business that connects the value prop to its distribution?
How does the business survive in the short term while adhering to its long-term vision through transitional business modeling and market dynamics?
These non-linear analyses aim to isolate the short-term buzz and noise, identify the signal, and ensure that the short-term and the long-term can be reconciled.
