Closed frontier AI labs are stuck in a self-created 'capex trap': having raised money at valuations premised on a per-use toll-road pricing model, they can't offer a more viable win-win business model even as cheaper open alternatives erode their pricing power.

84:57to doubt it. So okay, if it's a magical text, then we should put like a huge price tag on it. But when you're sometimes looking at the e economical realities, it doesn't work out like that. There are like a ton of examples where the service is extremely valuable but very very hard to monetize, right? Like so now like we have like this interesting story where I think it's

85:16kind of clear that Chinese companies, you know, like deepse moonshot, they're like really not that far behind in LLMs. But if you look at the valuations of these companies at their last round, we're talking about I don't know tens of billions like maybe around like 50. No one is talking about the trillion but like wait a second guys it's like the same underlying tech. So what's going on? So I think it's we

85:38sometimes internally calling like the capex trap. These guys spend like so much on the data center, so much in compute, like raise such a crazy amount of money and creating such an expectations that they just like really try to create a business model that's a toll road, right? Like that every time that you touch their model, you are paying them and uh maybe it could work in the past, but giving the the

86:03availability of Chinese model, I just like don't see how it's going to unfold like that. So imagine that in the world of world models we are providing an alternative to people who do not want at all road business model. So we're coming and say listen guys if you are not if you're not hitting $10 million threshold you can use the model for free just like you know build something cool get to

86:30some kind of traction and then we can discuss licensing. Once you're hitting 10 millions of dollars revenue let's discuss licensing. it can be multi-year deal that's extremely predictable for you so you can manage the cost etc. And to me it's obviously why the big guys don't want to do it because they just like this model is like way way less lucrative economically than to creating a toll road. But our claim is that toll

86:53road isn't going to be viable alternative because if you're offering a different business model that's more of the win-win more and more people going to switch there. And I think like GLM recently is a great example of that, right? Like once you start edging the capabilities of closed models, then a lot of people suddenly start to think about costs. [music] We asked what people actually do with an

87:14open world model that a closed API cannot offer. >> Yeah. So like in terms of parameter counts like from like my understanding that the moment that the recent closed stuff that you saw and you're going to see is that the order of magnitude of like couple of hundreds of billions of parameters right I didn't hear about like a world model that hit like trillion parameters just yet maybe um I