01:23:43 · John Coogan, Jordi Hays
[01:23:43] S1: Yeah. Totally. Yeah. [01:23:44] S0: How do you... How how do you process the... Like, some of the criticism right now of the AI trade is that you have a very small number of companies driving the majority of the spend. Think I if you can look historically and say that that same dynamic probably played out with like social media ads, where like a very small number of companies were driving a massive amount of the spend. And so you're gonna kinda see power laws in a lot of places. My read on it is that you have, like, there are companies based in San Francisco that are just a thousand times more obsessed with AI than the than the say... Let's say like the long tail of public company employees. And so of course they're gonna spend dramatically more. And it's possible that that long tail never actually cares enough, but they sort of fade to relative obscurity. And you have the disruptors that are saying like, yeah, this technology is real. It works. It's not perfect yet. It's not like a drop in coworker that immediately, you give it a dollar and will give you $10 back. But it's very capable, and so if you obsess over it. And so that's been sort of my overall read. Like, I don't think it's necessarily... Of course, you'd want a more diversified revenue base if you could. But in general, it feels very natural that all the spend is coming from a very small group of people that like realize that something fundamental has changed and they're trying to take every advantage of it while the rest of the world is asleep.
01:25:09 · Gavin Baker, Jordi Hays, John Coogan
[01:25:09] S2: I might respectfully disagree a little. In S1, there are only 250 accounts spending more than $10,000,000. So actually, know, somebody in the New York Times said that, you know, maybe ten days ago that 80% of the revenue came from eight customers. I was actually shocked how diversified their customer base actually was. And if you are... [01:25:34] S0: Well, the the number to me was the the... Something like eleven or twelve thousand spending over a $100,000. Like that that feels diversified. [01:25:41] S2: Oh, yeah. [01:25:42] S0: But I'm but I'm talking about like the ramp data that's saying like, look, like 1% of companies are spending, you know, 90% of the dollars. [01:25:51] S2: Well, I I mean, the ramp data is what it is, but we have much more authoritative data now from the Anthropic S1. [01:25:58] S1: Yeah. [01:25:58] S2: Yeah. And it shows a very diversified spending base for Anthropic. Yeah. Now maybe the ramp data is correct for AI overall. Sure. But the Anthropic S1, like relative to a thought that, you know, Meta was spending 10,000,000,000. [01:26:13] S1: Yep.
01:26:13 · John Coogan, Gavin Baker
[01:26:13] S1: Yep. [01:26:13] S2: And there were these multiple billion dollar plus accounts that were driving it all. That just, it's much more diversified customer base for Anthropic. And then for the AI broadly, I do think that something that has happened since June is you've really seen, you know, first we saw OpenAI really accelerate in the summer and has OpenAI accelerated so did open weight models. And there are so many companies, you know, whether it's Fireworks, whether it's Base ten, whether it's Together, whether it's Modal, whether it's Cognition that are at scale really open weight first and they're all growing faster than either OpenAI or Anthropic. And that was true when OpenAI was really accelerating in the summer. Yeah. And it's still true in October when Anthropic has had clearly a pretty big reacceleration. Like, I just... I'm pretty skeptical that they would have put the, you know, the you know, the blank space for the October ARR in the s one if they didn't know it was gonna be pretty good. Yeah. And I do think it'll be great for the market to get away from these monthly ARR things. [01:27:22] S1: Totally. [01:27:23] S2: But to me...
01:27:23 · Gavin Baker, Jordi Hays, John Coogan
[01:27:23] S2: But to me... [01:27:24] S0: Yeah. It's interesting. Yeah. Like seeing the the the modals, base tens, the fireworks, the together's all out. You can probably... I feel like this is common knowledge. Basically, all... They've all been out in market. And so private markets investors have been getting these sort of updates. And and a lot of these companies have been like starting fundraises, growing dramatically from the period where they got their first term sheet to when they're actually like pulling in capital. And so that that data is like broadly, like I would say the East Coast is just not aware of that at all. Some of them are picking it up but it's not like sort of common knowledge whereas on the West, I would say like over here, people are like, yeah, these companies are... We're already at scale and then they're growing, you know, double digits just during the period of like first term sheet to close or like first close. Well, [01:28:18] S2: my firm, Atreides led the last fireworks round, and it was actually hard to price it because they were growing so fast. Like, [01:28:27] S1: we thought we had a handshake. Yeah. Like, well, we increased revenue. [01:28:31] S0: Yesterday's price is not today's price. [01:28:33] S1: Yeah. You're like, please, like, let's let's just get the deal done. Yeah. Lock it. [01:28:37] S2: I mean, literally, it's like the valuation was going... You know, the multiple was effectively going down, you know, every day. [01:28:43] S1: Every day. Yeah. That's crazy.
01:28:43 · John Coogan, Gavin Baker
[01:28:43] S1: Every day. Yeah. That's crazy. [01:28:44] S2: And if anything, it feels like that ecosystem has accelerated and diversified. Yeah. Because earlier this year, cursor was a real big driver for all those inference clouds. [01:28:55] S1: Yep. [01:28:55] S2: And I mean, the x cursor growth, I think, you know, is is what's really extraordinary enough just because, you know, SpaceX has been insourcing the Cursor compute. [01:29:05] S1: Yes. So on on Cursor SpaceX, like the post merger integration, it feels like GrokBot has stepped forward in terms of capability. Is the key to growth there... Like, we haven't seen the the models from xAI, like, stunned on a particular benchmark, but the Cursor team has always been fantastic on product and distribution. In the prior era, Grok was putting up pretty remarkable results on the on the benchmarks, but then there were all the political considerations, and the the product was banned in some companies. It feels like Grokbot might be in a particularly different slot because they have that go to market motion through Cursor with the Cursor design team behind it. Is that what's driving growth there? What are you seeing on the GrokBot side that's actually showing, acceleration in that product category?
01:29:05 · John Coogan, Gavin Baker
[01:29:05] S1: Yes. So on on Cursor SpaceX, like the post merger integration, it feels like GrokBot has stepped forward in terms of capability. Is the key to growth there... Like, we haven't seen the the models from xAI, like, stunned on a particular benchmark, but the Cursor team has always been fantastic on product and distribution. In the prior era, Grok was putting up pretty remarkable results on the on the benchmarks, but then there were all the political considerations, and the the product was banned in some companies. It feels like Grokbot might be in a particularly different slot because they have that go to market motion through Cursor with the Cursor design team behind it. Is that what's driving growth there? What are you seeing on the GrokBot side that's actually showing, acceleration in that product category? [01:29:55] S2: I mean, as a user, Rockbot is the most impactful AI product to me and to and to our... You know, to our... The... To the to the firm Yeah. That we've had yet. Like, you know, I clued together all this stuff with Claude code and Yeah. Like really, you know, I'm sure it was user error on my part, you know. Sure. 50 years old. Yeah. I'm doing my best. But Grok Bot, it just makes it so easy. I think I'm up to like 17 Grok Bots. [01:30:23] S1: Woah. [01:30:23] S2: And every day, I think of a new one to add. That's good.