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“Their valuation is based on bigger is better, which is not necessarily the case,” Babak Hodjat, chief AI officer at Cognizant told Fortune.

“We do use large language models. We don’t need the biggest ones. There’s a threshold at which point a large language model is able to follow instructions in a limited domain, and is able to use tools and actually communicate with other agents,” he said. “If that threshold is passed, that’s sufficient.”

For example, when DeepSeek brought out a new model last January, it triggered a selloff in tech stocks because it reportedly cost only a few million dollars to develop. It was also running on a model a lot smaller than OpenAI’s ChatGPT but was comparably capable, Hodjat said.

“A 17 billion-parameter DeepSeek model was better than ChatGPT 3.5,” Hodjat said. “To put that into perspective, GPT 3.5 was more than 400 billion parameters and had to be run in a data center. A 17 billion parameter model can run on your MacBook. That’s the difference, and that’s the trend.”

A number of companies are orienting their services around AI agents or apps, on the assumption that users will want specific apps to do specific things. Superhuman—formerly Grammarly—runs an app store full of “AI agents that can sit in-browser or in any of the thousands of apps where Grammarly already has permission to run,” according to CEO Shishir Mehrotra.

At Mozilla, CEO Laura Chambers has a similar strategy for the Firefox browser. “We have a few AI features, like a ‘shake to summarize’ feature, mobile smart tab grouping, link previews, translations that all use AI. What we do with them is that we run them all locally, so the data never leaves your device. It isn’t shared with the models, it isn’t shared with the LLMs. We also have a little slideout where you can choose your own model that you want to work with and use AI in that way,” she said.

At chipmaker ARM, head of strategy/CMO Ami Badani told Fortune the company was model-agnostic. “What we do is we create custom extensions on top of the LLM for very specific use cases. Because, obviously, those use cases did vary quite dramatically from company to company,” she said.

This approach—highly focused AI agents run like separate businesses—stands in contrast to the massive, general-purpose AI platforms. In the future, one source asked Fortune, will you use ChatGPT to book a hotel room that fits your specific needs—perhaps you want a room with a bathtub instead of a shower, or a view facing west—or would you use a specialized agent that has a mile-deep database beneath it that only contains hotel data?

This approach is attracting serious investment money. IBM Ventures, a $500 million AI-focused venture fund, has invested in some decidedly unglamorous AI efforts that fill obscure enterprise niches. One of those investments is in a company named Not Diamond. This startup noticed that 85% of companies that use AI use more than one AI model. Some models are better than others at different tasks, so choosing the right model for the right task can become an important strategic choice for a company. Not Diamond makes a “model-router,” which automatically sends your task to the best model.

“You need someone to help you figure that out. We at IBM believe in a fit-for-purpose model strategy, meaning you need the right model for the right workload. When you have a model router that’s able to help you do that, it makes a huge difference,” Emily Fontaine, IBM’s venture chief, told Fortune.

Renewable energy investors have warned “deep structural issues” are driving a slump in solar and wind investment in Australia, with commitments on large-scale farms at the lowest level in almost a decade.

Clean Energy Regulator data shows the government agency expects 2.5GW of industry-scale renewable energy capacity to reach a final investment decision this year, down from 4GW last year. The 12-month average for investment commitments on new developments is at its lowest since early 2017.

While the share of electricity from renewable energy has increased to more than 40% after years of growth, experts have warned that the construction of solar and wind farms needs to accelerate substantially if the Albanese government is to meet a target of 82% of electricity coming from clean sources by 2030.

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The regulator said there was “real potential” that much more could win financial backing next year, in part due to its expanded capacity investment scheme, an underwriting program for the solar, wind and batteries needed to replace ageing and dirty coal-fired power stations.

But the chief executive of the Clean Energy Investor Group, Richie Merzian, said the lower financial investment decisions were a “symptom of deep structural issues, not just a blip”.

“The structural issues include state planning delays, grid connection uncertainty, transmission constraints, rising project costs and lack of long-term revenue certainty,” he said.

Merzian said the underwriting program had helped to develop a large pipeline of potential projects, but that they would not deliver the new energy capacity needed unless companies made final investments.

“The contrast between the large pipeline and the limited number reaching [financial investment decision] indicates a system that is not functioning as intended,” he said.

Renewable energy that has previously had private financial signoff continues to be added to the grid. The Clean Energy Regulator said it anticipated nearly 7GW of large-scale generation and rooftop solar systems could be connected this year.

But the Climate Change Authority last week warned more would be needed if the government was to meet its targets. It said the pace of growth in large-scale renewable energy generation would need to more than double over the next five years.

Frankie Muskovic, executive director of policy for the Investment Group on Climate Change, said the reduced investment decisions this year were “a concerning trend” and needed to accelerate to meet renewable energy and climate targets. The latter includes a 43% cut in emissions by 2030 and at least a 62% cut by 2035, compared with 2005 levels.

She said some state planning changes and an ongoing review of the National Electricity Market could be causing uncertainty, but that large-scale renewable energy developments were often marginal investments and the underwriting program needed to offer more support for each project that received a contract.

Muskovic said the scheme should also run past its scheduled closure date of 2027. This would give investors greater confidence to back renewables projects, she said.

“Maybe we need more data to confirm if this is a blip, but everything we are hearing suggests this is not. We need to be ready and able to put more support into bolstering the [scheme],” she said. “We need to be shoulder to the wheel on this, and state governments need to be along for the ride.”

Giving an annual climate statement to parliament last week, the climate change minister Chris Bowen said the government had more than 16GW of renewable energy projects under contract or in negotiations through the capacity investment scheme so far, with up to 10 tender rounds remaining.

He said he expected about 11GW of capacity to have reached financial close by the end of 2026.

A separate report by the Australian Energy Market Operator (Aemo) on Monday warned urgent investment was needed in new “system security” energy infrastructure – particularly synchronous condensers – if New South Wales’ Eraring coal-fired power plant was to shut as planned in 2027.