When people want to argue that AI is a commodity, they confuse two concepts

1. switching costs

2. fungibility

I do agree that LLMs have low switching costs. But they are not fungible - each model is unique with different strengths and weaknesses.

I also disagree that they can increase switching costs by moving in application stack.

For instance, oil and electricty are commodiites because they are fungible, not because switching cost is high.

Whereas clothing has low switching cost but not fungible