Meta's Spark 1.1 release, moving from free open-weight distribution to an aggressively priced paid API, means Meta is now competing toe-to-toe on the same commercial model as the frontier labs, which is bad news for OpenAI and Anthropic.
Rory says Meta's Spark 1.1 launch — abandoning open-weight generosity for a paid, aggressively-priced API — is a real competitive threat that OpenAI and Anthropic would have preferred not to see. ✦ AI generated
Rory · 20VC · 2026-07-16 · original ↗
starts at this moment · 13:18
“How did we think about the release of Spark and was it a meaningful progression for Meta in the fight against open AI and anthropic?”
the big picture point is in the game using the same business model as everyone else entering the marketplace with the low price product big hit to competition I mean it's you know going toe-to-toe with the balance sheet to afford it right will it be ROI positive over five or 10 years to be the fourth player in the market selling at that price I don't know But, you know, if you're open AI and Entropic, you'd have preferred this not to happen.
verbatim transcript · starts at 13:18
12:59decent product I've used it as an end consumer it actually you know I compared and contrasted to claude and some answers it was pretty good but of course the real test isn't worry the end user the real test is coding and you know they they reported good benchmarks but in the past their benchmarks haven't been as good and we'll talk in a second about benchmarks but fundamentally the
13:18big picture point is in the game using the same business model as everyone else entering the marketplace with the low price product big hit to competition I mean it's you know going toe-to-toe with the balance sheet to afford it right will it be ROI positive over five or 10 years to be the fourth player in the market selling at that price I don't know But, you know, if you're open AI
13:41and Entropic, you'd have preferred this not to happen. >> It seems to me like for look, it's the tweets's fun. Clearly, they want to win the eval game and the eval tweet game that's out there. It gets attent like it clearly gets attention, right? Where you are on on the evals gets attention. It's very valuable. It's worth going on Twitter for Zuck. Um, my view is that my
14:02Captain Obvious view is everyone's going to be token maxing if they aren't already. everyone's going to hit the limits. I finally hit my quad limits yesterday for the first time um on my max plan and I had to decide what to do, right? So, everyone every and as every organization goes from burn all the tokens you want baby to budgets, however you do it, whether it's automated,
14:25whether it's manual, whether it's picking a drop down, everyone's going to have to have a cheaper model. It may be in your product for cheaper uh workflows, it may be for coding. So everyone, so so at the moment this seems like a battle for for for the cheap seats >> and it's a big battle for the cheap seats and um we'll see what happens. Um we don't talk about it, but I think
14:46Haiku from Anthropic is a pretty damn good product and in one day they could make it better just by by adjusting the slider of how much opus uh you get in Haiku. I literally use a massive amount of Haiku and for like cheap simple stuff it's really good and it's a tenth of a cent, right? And so there's a battle for this second bucket. How much of the
15:07margin is there? How much of the revenue? Who wants to win in it? I don't know. So I think it's interesting, but but it it it appears to be a battle in the frontier bucket, but I think it's a battle to in the Btier bucket where there's still a lot of volume, but how much margin of revenue is TBD? >> I think that's correct. Not quite. But