Small Specialized Models Are Eating the AI Stack (While Everyone Watches Frontier LLMs)

While everyone focuses on large frontier AI models, the real workload inside AI agents is handled by smaller, specialized models doing repetitive tasks like embedding, reranking, and data extraction. These smaller models deliver about 97.5% of the quality at a fraction of the cost, with self-hosted embedding running $10-$17 per billion tokens versus $120-$130 for hosted APIs. Superlinked's open-source SIE tool solves the infrastructure challenge by running multiple small models on a single GPU efficiently.