This Week In Business AI: The State of The AI Economy [Week #48-2025]
November 2025 marks the definitive transition from the model race to what we’ve long called the “infrastructure-application sandwich.” The patterns we identified in earlier analyses—vertical integration pressure, model commoditization, and the emergence of alliance capitalism—have now crystallized into a concrete market structure.
This briefing integrates three frameworks we’ve developed over the past years to make sense of this moment:
The Deep Capital Stack explains why infrastructure deals now determine AI outcomes. Six interconnected layers—from geopolitics to software—must align for AI dominance. November’s $500B+ in announced deals validates this framework.
The Great AI Convergence predicted that companies would either expand across the entire value chain or face extinction. OpenAI’s Stargate, Amazon’s Trainium empire, and Google’s TPU-to-Meta deal prove the thesis. Pure-play model companies are being squeezed.
Alliance Capitalism vs. Isolation Management framed the US-China competition. The US pursues network expansion through strategic alliances; China responds with vertical integration. November reveals how both strategies are accelerating—and how China’s efficiency innovations under constraints (Kimi K2, DeepSeek) are reshaping competitive dynamics.
The Bottom Line: The winners of 2030 are being determined by three questions: who controls the silicon, who controls the commerce rails, and who controls enterprise workflows.
Models are becoming the commodity layer squeezed in between.
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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.