AI stock profits are at risk of shrinking, which is bad news for investors piling into the biggest AI names.

• AI makes money in three layers: the models themselves, the software built on top, and the computing hardware underneath.
• The models are becoming a commodity — too many rivals offering the same thing, so prices and profits get crushed.
• That makes both the model layer and the hardware layer risky places to put money right now.
• When a chip boss says demand is "infinite" and may never be met, that kind of hype often signals a market peak, not a floor.

Outlook: Expect profit margins in AI to come under pressure, especially for model makers and chip suppliers, while software firms may hold up better.