We're in 1997 for AI—early, exciting, and deeply uncertain about what comes next. Benedict Evans, independent tech analyst and former A16Z partner, argues AI is as transformative as the internet or mobile, but only as transformative. The real value will accrue to distribution and applications, not foundational models, which face commoditization pressures similar to cloud infrastructure. Foundational model companies likely face margin compression over time because models lack network effects and don't create winner-take-all dynamics, meaning value accrues to applications and distribution layers instead.