The market for frontier intelligence has consolidated into a duopoly of Anthropic and OpenAI that can charge premium prices, while everything else is commoditized to the point where you can only charge for compute, inference, and consulting — not the model itself.

9:54layer? >> Here's what I think is going on in terms of the the market structure is when I saw this Google news, my reaction was and then there were two because like Brad was saying, we used to have five major companies in the hunt to be the leading frontier lab, the leading frontier model just a year ago. Now we're really down to just anthropic and open AI. So the market for frontier

10:19intelligence has become a duopoly. Now Elon is still on the hunt. I'm sure Google would say they're still on the hunt, but like Brad is saying, they may have contradictory incentives there because they can actually do quite well just with their compute. So I think that the market for frontier intelligence has become a duopoly. I think it's a very powerful duopoly. I don't think it's being commoditized. I think that what

10:41we're evolving to is a two-tier market structure where there's a market for frontier intelligence and there's a market for let's call it kind of commodity or lagging intelligence whatever you want to call it that's 6 to 12 months behind. There is a market for those tokens those models but the reality is you can't charge anything for the weights. You can charge for the compute you can charge for the inference

11:04that you're providing. You can charge for essentially consulting services to help put the whole thing together. But if you're not at the frontier, you can't charge for the model layer itself. If you are at the frontier, you can charge a premium. And that's where Anthropic and Open AI are. And I think the proof for this is just you look at the growth rates of these companies. The

11:27latest we heard is Enthropic is now over 80 billion of ARR. Started the year at 10. It had forecast 100 billion as exit ARR for the year. And most people said that that would be impossible to achieve. Now it looks like they're going to do it with a couple of months to spare. So their estimates are going up. I mean 110 120 or higher for end of year

11:49ARR. Open AAI seeing acceleration. So I think what you're seeing now is a very clear bifurcation in the market. You've got a frontier model duopoly that can charge a premium. I think of it like Apple. You know Apple's competing against Android. It's open source. Android actually has more users in the world, but all the monetization goes to Apple because people are willing to pay for the premium experience. I think in a

12:15similar way, people are willing to pay a premium for true frontier intelligence if it's really at the leading edge. But if you're not the leading edge, there's a huge market for that, too. But it's highly commoditized. People are just willing to pay you for the compute. >> So, I mean, that's what I see happening right now. >> Yeah. >> Jason, what do you think? Jason, what do

12:34you think? thing. Uh, well, if you look at Google Cloud, they posted 82% year-over-year revenue growth, which is something we've never seen uh, in the history of these cloud providers. Elon Musk and XAI just had the SpaceX earnings. We're going to get into that, but they also had massive uptick in their Elon web services, as I've dubbed it. And if you look at Google, I still think Google will be the number one uh