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Jason: I mean an eval is just an eval. So let's not take a bunch of folks on X who had someone in their uh in their engineering department look at some evals and write a tweet for them. Okay? like it we're not saying something uh is similar in performance maybe but but but let let's prove it in the field having said that I mean we can't even sign up new as consumers for Kimmy because it's blocked they have so much demand since this happened right demand is is literally I don't know whether it's geometric or exponential but it's so high we can't even we can't even we need we we can come back to this next week when it opens up and I can use it on the consumer side even better but I mean I think it there's a lot going on and there's a lot on politics and there's it's an aha moment and a wakeup moment. On the other hand, it's not new. It's not new, right? I mean, if you look at, you know, if you look at open router data, half the traffic's through China, China created models. Even China models is a confusing term, right? They may well be hosted on uh yeah, they may well hosted in the US, right? And when they have open weights, they may be they may be for all intents and purposes truly open source models hosted in the US. Uh but it's not new. It's just going to accelerate this. And that's why you see the stress. It's just it's accelerating.

Jason: I don't think you're going to convince me there aren't some data export risks with China based models. You're just not going to convince me based on what I've done with all our agents in building. And if you're not going to convince me, I don't think you're going to convince 99% of the world that there isn't some security leakage issue. It's already scary how much of our data we put into these closed source models in the US. It is scary. Here's Elon saying scam altman every day to create distrust. Right? I there are we cannot understand what these models do. They are connected to the internet. We cannot even even if we have fable read it and have it read it itself. I don't think you're going to convince most of us there isn't data export risk.

Jason: the real question is how limited is it going to be, right? How limited are we going to because it's it's going to be limited. The availability of China built models to penetrate the is going to be limited. The question is just how much... you know, the quest for equivalent models at a cheaper price is just going to keep going up. It's just going to keep going up.

Rory: it's also worth pointing out that while we're talking about banning Chinese openweight models, the Chinese administration are talking about preventing those companies from selling those models to the US. Like just like we don't let them buy Nvidia, they're not going to let us buy their open source models. So which is kind of totally zany. We think they're trying to sell it to us and we don't want to buy it and they think they're trying and they think they shouldn't be selling it to us cuz it's so powerful. So we can that's kind of just weird in of itself. But I think the really interesting question here and it gets to thinking machines is is the opensource LLM open weight low let's call it openweight lowcost LLM business a good business and if it's a good business why can't some red-blooded American company step up and give OpenAI and Antropic a run for the money and Jason it's the point you made if this is I mean where's Grock where's Gemini I thinking machines had an announcement last week. I they announced a model. They they didn't position it as, you know, state-of-the-art frontier, but they kind of I think they made a comment on something that you can build upon. Inkling, I think it was called. So, one of the and you know, at one point, Meta looked like they were going to go down this route, right? Is there a business? How can you make money? It's an interesting question. Can you make money as a maybe not completely openweight but a lowcost US provider of these models and be competitive with those guys because you know the the open weight models in China are getting 5070 billion valuations like it's not entropic but I wouldn't turn down a $50 billion outcome if someone could make a convincing case to me that a US company could do this.

Jason: Because the market's in flux. Everyone's figured out they need this. Open router like a lot of folks was was was was early and benefited from it and deserves it. Right. This is a repeat founding team that saw that there would be value to having a a fairly heterogeneous mix of models that when we started this pod probably made no sense at some level. It probably seemed too nerdy and too niche and too cool cat developer who who's going to need like yeah sure there's a little it's cool but uh you know guys like Rory and me we're going to stick to the big guns, right? and uh it everything broke well for them but it's still a niche product that more and more people are going to build variants of themselves and is this the plumbing they will pick will you know if you're on a lot of plat if you're on adjacent platforms if you're using data bricks gateway they'll they have their own harness they'll figure this out for you there will I don't know whether ramps competitor even makes sense like I but um it's my point is it's something that's going to become embedded in so many vendors that if I could sell for a lofty multiple of my last round. I I I might I might check out a five or six billion. Like it it just just it's just just because the next you you you've achieved a certain amount of victory in a market that's going through radical change and becoming part of everything.

Jason: sometimes if you're early you can gain a lot of traction in something that becomes somewhat commoditized it's just it's just the way it goes and if you and the perfect outcome is to sell the moment it becomes commoditized but before everyone fully realizes it. That's when they'll give you the money, but that's before the value decrease rather than increase. And it my gut is it might be. It might be now.

Rory: My mental model is I divide the AI world up into three buckets. It's the making AI, the infrastructure layer, right? And you're right, the spend there is 8 $900 billion a year. Then there's the two foundation model companies themselves and they're doing plus or minus hundred billion dollars a year, right? And then taking those guys out, rounding up every other apps company, right? You struggle to make 40 or 50 bill. You struggle. You start with cursor at four because I think coding is an app. You know, you by the time you're throwing in Harvey, you're adding two 300 million, right? It's amazing. I mean, just the difference in spend. And you know, at some point, the people spending a trillion dollars a year are going to want some apps to pay for all this, right? But right now the volume has it's been front end loaded on the infrastructure side.

Rory: if those enterprise models if those openweight models really impacted the growth rate of anthropic and open AI Then obviously when your 80% customer slows down it would have a significant impact on your growth rate right but you know if it's any consolation Harry if that happens worrying about your merur valuation will be the least thing people are worried about because you'll see an implosion of much bigger market cap entities right and you that's that frankly is the billion dollar question you know can these two foundation models maintain their growth trajectory which is starting to become profitable at least in the case of open of entropic in the face of all this openw weight competition in the face of this push back um on costs and basically kind of push for ROI if they can maintain this trajectory for even another one or two years then everything's fine and everyone's fine and right now the data says they are if you start to see slowdown on those two ARR growth rates then you know all bets are off because the pressure because the amount of commitments they've made assuming that 10x growth rate continues will mean that even if it slips to a 2 or 3x growth rate there's going to be a mad scramble

Jason: The board rejected it, right? And the fact that the board rejected it means to me that they're going to accept it. You reject it because no no investment bank will tell you you're allowed to make your highest offer up front. It's like not a it's like you probably breach your fiduciary duty if you make your you have to offer like uh whatever. You have to have another five or 10% to put into the deal. So it's a dance. They they they're going to accept it. They're just uh it's a bunch of mercenaries in a brand new CEO who's probably going to make nine figures for uh 10 or 12 months of work.

Jason: I think it happens. Let me just step back. Rory's got even more experience, the two of us, but it's just a dance. The board rejected it, right? And the fact that the board rejected it means to me that they're going to accept it. You reject it because no no investment bank will tell you you're allowed to make your highest offer up front. It's like not a it's like you probably breach your fiduciary duty if you make your you have to offer like uh whatever. You have to have another five or 10% to put into the deal. So it's a dance. They they they're going to accept it. They're just uh it's a bunch of mercenaries in a brand new CEO who's probably going to make nine figures for uh 10 or 12 months of work. They're go by rejecting it. It means they're going to accept it.