# Generation 1 vs Generation 2 AI

*Source: https://steadman.ai/newsletters/david/gen1-vs-gen2.html*
*Published: March 2026*
*What changed between ChatGPT-era AI (2022-25) and Claude Code-era AI (2026+)? Chatbots vs agents, GPTs vs skills, and where the real ROI is.*

What changed, and why it matters.

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## The landscape: three tiers

### Generation 1 — The ChatGPT Era (2022-25)

**Gen 1a: Free / Constrained**

Whatever your organisation provides by default. Shorter context, weaker models, no memory. Limited by design.

Examples: Free ChatGPT, free Claude, basic Copilot, bundled tools.

My strong recommendation: don't waste time here.

**Gen 1b: Pro / Competent**

Good general-purpose applications. Dramatically more capable than the free tier: longer context, stronger models, useful features.

Examples: Paid versions of Claude, Gemini, or ChatGPT.

My strong recommendation: Claude.

### Generation 2 — The Claude Code Era (2026+)

**Gen 2: Agentic / Frontier**

General-purpose agents that can interact with your computer. They don't just answer questions; they read files, write files, pursue objectives, and complete entire workflows independently.

Examples: Claude Code, ChatGPT Codex, Google Gemini CLI.

My strong recommendation: Claude Code.

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## How each generation productises

**Gen 1 → GPTs (Packaged prompts)**

Productised as GPTs: packaged prompts for single tasks. You work out how to research a company, save the prompt, reuse it for the next one. One task, one prompt, one output.

**Gen 2 → Skills (Packaged agents)**

Productised as skills: packaged agents for whole workflows. I built a process that researches every nightclub in a market, scores them on multiple dimensions, and produces a live dashboard. Then reran the whole thing in one click for completely different industries: sake breweries, horse racing, Scotch whisky, Greek yoghurt.

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## A dual strategy

### 1. For the many — Pro / Competent (Gen 1 tools)

Move less-engaged people from constrained, default tools to competent use of good general-purpose applications. This in itself is a big return on investment.

Free → Pro

### 2. For the best — Agentic / Frontier (Gen 2 tools)

Accelerate your best people with agentic tools. They'll build workflows that deliver outsized impact, and those workflows become reusable for everyone else.

Pro → Agentic

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*Saturday AI Thoughts — David Boyle*