The AI application layer is not generating significant revenue yet — infrastructure and foundation model companies dominate spending, making the app layer almost a rounding error in comparison.

36:46applications run a muck. Everyone thought you'd replace your sales source. You even had a guest the other week who was I forget saying how great it was. He replaced Salesforce. Who cares, right? Um didn't kill software, but where where where is the software renaissance? I I mean the revenue is there. We've talked about leaders, right? But it it's so trivial compared to the infrastructure. It's so trivial. It's almost a rounding

37:05error uh the application layer. And >> just to dimension that because I agree, Jason, I mean look, I'm an app investor. It hasn't, you know, you look back and you what's going on here? You've got companies like, you know, um, fireworks doing a billion dollars. There's very, there's very few apps companies doing that. And, you know, zooming out a million miles. You my mental model is I divide the AI world up

37:25into 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

37:50think coding is an app. You know, you by the time you're chucking 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 and at some point

38:11the revenue has to match it. But right now info has been the place to be. Like there's probably more money being spent on training data for the foundation models you [snorts] the merker surges and that than pretty much any app company outside of cursor. In fact, probably the sum of all the apps companies outside of cursor, right? You know, are probably less than the amount that Entropic and Open AAI are spending

38:36on training data, which is just amazing. >> That I can guarantee when you look at McCoring 2 billion in AR, >> two billion for Merco surge, another billion, you get to four or five billion and you know, >> Surge is three. >> Yeah. >> Handshake's one. I mean >> I mean yeah maybe if you start throwing in on the other side the the consumer products like Higsfield you get to

38:54roughly the same place but it's astonishing the scale of the investment versus the scale of the apps at this point means that all the actions on the info side for now if we bring this all together we you know we mentioned fireworks at the start Lynn said in the show the future would be every company having specialized models with their own data um we mentioned Harvey there who've