01:19:10 · John Coogan, Jordi Hays, Doug O'Laughlin
[01:19:10] S1: Yeah. Yeah. I mean, even if there's no ban there there's there... We were talking about like the the carrot is like bug bounty maybe from the government, but the the stick is like something that's not quite nationalization, but it's the government saying like, I am ordering you Anthropic, OpenAI, Google to devote millions of dollars in compute to setting up swarms to go patch the internet and fix Yeah. Everything. And you have to do it. Like you have been conscripted for this and maybe it's a tax write off. But like you gotta... [01:19:42] S0: What kind of timeline are we looking at to have a American open weight model that people are like genuinely excited about? Like getting like this changes everything. Yeah. Know? I wanna see the pelican on a bike and have people losing their mind over the pelican, right? When are we how far away are we? Like clearly Jensen cares about this. Yeah. There's rumors about Reflection. Reflection and them going in house. But like, is this like a three month thing or like a, you know, November surprise kind of thing? [01:20:18] S6: I I mean, I think the reflection is our best shot so far. And even though it wasn't quite at the frontier, it was like a... The frontier of open models. Sorry. Mhmm. The frontier of open models, it did look relatively parameter efficient. But if I'm gonna be honest with you, it wasn't exactly like, wow. We're so bad. Because, like, you know, one month later, Kini three point one looks like it's a frontier model. Right? Yeah. So... Yeah.
01:20:18 · Doug O'Laughlin, John Coogan, Joey Brookhart
[01:20:18] S6: I I mean, I think the reflection is our best shot so far. And even though it wasn't quite at the frontier, it was like a... The frontier of open models. Sorry. Mhmm. The frontier of open models, it did look relatively parameter efficient. But if I'm gonna be honest with you, it wasn't exactly like, wow. We're so bad. Because, like, you know, one month later, Kini three point one looks like it's a frontier model. Right? Yeah. So... Yeah. [01:20:43] S1: What what else is changing? Maybe, Joe, you can fill us in on some of the trends on tokenomics. I mean, from the s one, it looks like the cost per task is getting... Is coming down. There's a lot of progress there. But what other trends are you seeing in tokenomics broadly on the demand side? What Fortune 500 companies are asking for? What businesses are asking for? Like, how is the tokenomics model changing in some of the analysis? [01:21:09] S8: Yeah. I think the biggest misconception is actually on the Fortune 500. Okay. A lot of the business today is really driven by ninety ninth percentile customers. If you look like the ramp data, example. Yeah. You know, the top 1% of customers are spending a 100 k per employee. You know, they came out today. The s one said the top 5% of cloud enterprise users are spending 18,000 a year per employee. [01:21:29] S1: Wow. [01:21:30] S8: But, you know, the average non cloud code user is spending less than $75 per month. [01:21:34] S1: Sure.
01:21:34 · John Coogan, Joey Brookhart
[01:21:34] S1: Sure. [01:21:35] S8: And it was 0.1% of Fortune five hundred budgets were were cloud budgets according to their s one. If you look at who's spending heavily on the frontier, you have a few large companies like Meta, Microsoft, you know, other companies like Cursor that utilize the API. But the Fortune 500 Global 2,000 is very lagging in their per employee AI spend. Yeah. And I think, you know, the story in a '27 is, you know, we can see a decent step function change with a lot more budget allocated next year towards us. Yep. And kind of taking from more of the traditional IT and software budgets towards us and we can see a lot of growth outside of, you know, both coding Yeah. And on power users. [01:22:15] S1: In the Fortune 500, the one number that surprised me to the downside was that they reported over 50%, but not 90% of the Fortune 500. And I was like, oh, this is kind of bad. But then I realized, like, it's kind of bad for the Fortune 500 that they're not spending more. Right? Like what is going on in the Fortune 500? What is the what is the shape of a business that's not using AI in the second half of twenty twenty six look like? Is this like a lumber yard or something? Is it all humans walking around? [01:22:44] S8: No. You... You'd be surprised. Okay. Even at even at a lot of Fortune 500 tech companies, the Claude code budget might be 1,500 per month in tokens. Okay. Yeah. You know, that little and and a lot of people don't even hit that in the engineering organization. [01:22:57] S1: Sure. Sure.
01:22:57 · John Coogan, Joey Brookhart, Jordi Hays, Andre Haddad, Doug O'Laughlin
[01:22:57] S1: Sure. Sure. [01:22:59] S8: I think, you know Slowly. Areas outside like traditional white collar, you know, middle front back office work, you know, still is lagging a ton as well. Yeah. [01:23:06] S1: I don't know. Then some of those don't [01:23:08] S0: know if Doug could survive on 1,500 budget daily. Just [01:23:13] S1: Sounds like a nightmare. [01:23:14] S7: I could do $1,500 [01:23:16] S6: $1,500 a [01:23:17] S0: day. I I think... Insane though. [01:23:20] S6: I would go insane slowly. No. I think the thing that I hear that like... My my favorite is actually like talking to normal people. I went to a wedding this weekend in in good old Fort Worth, Texas, okay, with normal people. [01:23:32] S1: There we go. [01:23:32] S6: And they're like, dude, it's crazy. No one's like... Okay. One person who's like really AI pilled, of course, talks to me about AI. He's like, it's crazy no one's talking about this. And they're like, yeah. What do you use for work? And they're like, oh, yeah. Microsoft Copilot. Like, you gotta... The world is a big place, guys. Totally. [01:23:45] S1: Yeah. [01:23:45] S6: And and I think we are still pretty early into, let's say, the hyperadopter curve. Like, is... You know, like, the hyperadopters. Like, I would argue seminalysis isn't like that. Probably in the one percentile outcome of, like, people who are spending on quad. Right? [01:23:58] S1: Yep.
01:23:58 · John Coogan, Doug O'Laughlin
[01:23:58] S1: Yep. [01:23:58] S6: And we are like, okay. We can't go backwards. We definitely... Maybe we're not, like, like, going crazy with opus fast mode or something like that. Yeah. But I think that we will continue to be spending quite a bit, and I think what we're doing is a little different than the average company. We're a little younger. Right? There are companies out there where the average employee age is north of 50. Do you think they really care to figure out cloud code? No, dude. They're just trying to collect some checks before retirement. Like, I think that, you know, it just... It takes a long time for people to adopt new technology. This is something that's like the the technology industry has been very aware of for a long time. There's like an s curve in it... Of adoption, and I think we are still pretty early. So it's gonna take some time. My favorite my favorite theme is always to pay attention during the holidays, actually. You watch that their step functions of adoption happen during the holidays because young people go home to their... You know, to the boomer family and explain, hey. Have you seen muse try to buy you an advent calendar or something at Thanksgiving? And they're like, wow. This is magic. So there's there's some really cool things there that that's often why we see step function. A good example is Cloud Code's true inflection moment, even though they had, like, 4.5 out for a while [01:25:05] S1: Yeah.
01:25:05 · John Coogan, Doug O'Laughlin
[01:25:05] S1: Yeah. [01:25:05] S6: Was during Christmas because everyone had time off, and they're like, hey. I wanna vibe code a project. And then everyone's like... They came back to work, and they're like, guys, you gotta try this. [01:25:13] S1: So Yeah. So that's very interesting because in the s one, they they noted that revenue or or or token spend might go down by 20% in that two week Christmas holiday, but that's actually where your hardcore users are taking a break but your new users are actually coming in and you're sort of creating a new cohort that will scale and be the influencer of the next year, which is which is very interesting dynamic. [01:25:39] S6: That's Totally possible. Right? They're taking a break. But I think... I I I just think it's really interesting that these these adoption curves are, like... They're not continuous. And the most important thing is looking for the next adoption curve to see what the next what the next s curve is. Right? Like, it's very clear. Cloud Code is gonna be... Or, like, rather, let's say the the white collar work replacement is the biggest one possible. Yep. And it's, you know, relatively early on, but it's still really large wave. What's the next one gonna be? It's gonna be really hard. We... Biology could be, but I don't think it's gonna be anytime soon. Yeah. Cybersecurity probably is now moving up the list. Agented consumer stuff, definitely I think moving up the list with Muse. I've been...