arXiv:2508.21394v1 Announce Type: new Abstract: The focus of AI development has shifted from academic research to practical applications. However, AI development faces numerous challenges at various levels. This article will attempt to analyze the opportunities and challenges of AI from several different perspectives using a structured approach. This article proposes a seven-layer model for AI compute architecture, including Physical Layer, Link Layer, Neural Network Layer, Context Layer, Agent Layer, Orchestrator Layer, and Application Layer, from bottom to top. It also explains how AI computing has evolved into this 7-layer architecture through the three-stage evolution on large-scale language models (LLMs). For each layer, we describe the development trajectory and key technologies. In Layers 1 and 2 we discuss AI computing issues and the impact of Scale-Up and Scale-Out strategies on computing architecture. In Layer 3 we explore two different development paths for LLMs. In Layer 4 we discuss the impact of contextual memory on LLMs and compares it to traditional processor memory. In Layers 5 to 7 we discuss the trends of AI agents and explore the issues in evolution from a single AI agent to an AI-based ecosystem, and their impact on the AI industry. Furthermore, AI development involves not only technical challenges but also the economic issues to build self-sustainable ecosystem. This article analyzes the internet industry to provide predictions on the future trajectory of AI development.
Original: https://arxiv.org/abs/2508.21394