Infra Play #146: The state of cloud infrastructure software

Insights from The InfraRed 2026

The biggest story in software five years ago was the shift of value from the application layer toward cloud infrastructure software. The biggest story today is the merging of applications and infrastructure in the new computing stack, which we refer to as AI but which is in practice the move from utility to intelligence.

In this environment, cloud infrastructure software, together with the compute layer, is the critical "connective tissue" to get the most out of silicon intelligence. "The Infra Red" is an annual report by Redpoint that covers the thesis behind cloud infrastructure software and what's coming next.

While we leverage a lot of different benchmarks to evaluate how "smart" models are, the ultimate test is doing any task we throw at it and doing it right. While in the earlier versions of GPT and Claude models the architecture of the LLM was a limiting factor on how much context they could work with, today we are seeing most of the limitations driven by compute constraints. Given enough compute, models can run for many hours and test out solutions until they solve the problem.

While there are many (influential) opponents of the adoption of AI, the reality is that when money talks, bullshit walks. Companies are shifting significant spend into leveraging frontier models in their work, resulting in explosive revenue at the model layer.