The single biggest unknowable factor determining who captures value in AI is the market structure of the model companies — how many frontier labs compete determines whether token prices stay high or fall.

13:31prices that they can charge or restructuring of of the labor force. Um, the biggest driver of where value is going to get captured right now is I would say something that is totally unknowable, which is what is the market structure of the model companies? How much competition is there? If there's a couple at the frontier, token prices will probably be higher. If there are five at the frontier, token

13:56prices will probably be lower. Token prices being lower probably is better for the overall economy because there's not this pressure to kind of restructure the labor force as quickly as things get really, really big. Um, you know, right now the number is smaller. It's not five. Um, there's a tremendous amount of inelasticity for frontier intelligence right now. There's also question of how much does that change over time? Like, are a lot

14:24of the jobs that can be done fine to be done with previous generations of models? That's not the way anyone is consuming tokens today. Um, so, you know, that's an unknowable. The market structure is an unknowable. Um, you know, what role does open source play? You know, that's a tenuous situation. Um, you know, how much can you run locally? Um, how much can you run with small models? Like, these are all the

14:47open questions that I think will determine who captures value. Um, but for the broader ecosystem to thrive, it's probably competition that that keeps token prices, you know, lower. >> So, a couple of my colleagues are in China at the minute and it's been really interesting just getting their feedback, you know, relative to what we're seeing in the US. Um, and and one of the things that that

15:08that they were saying was that you know, the leading LLMs in in China are probably six months behind where we are in the US in terms of the capability of their models, but they're 10x cheaper. >> Yes. >> And so, like, one of the unknowns I think at the minute and is is, you know, to what extent are they you know what percent of the market will those type of

15:25companies capture? How much of of what we end up doing over the next decade will need to be done through the very frontier models and what can be captured by that next level down and it's you know it's the classic innovators dilemma, isn't it that that you get the next generation product that that can do 80% of what the the frontier product can do but at 10% of the cost. And over time