Brad Gerstner: Companies Will Pay 5x More for the Best AI

Jason, you talked about summarizing a document. May take 20,000 cheap tokens to do. Of course, shoot that to a lagging model or an open-source model. But if you're talking about replacing a software engineer for 2 hours, that may take 2 million expensive tokens. And the consequence of using something that's 95% as good is really high, right? Because you have a long-running task, and if the task breaks early, or it breaks in the middle, or breaks at the end, there's a huge cost to that. So >> You still pay >> the tokens, right? You And back to this analogy I was using, you're pulling the slot machine and you lose. >> And the time and the compute. So, if an

AI agent is replacing a $200 an hour consultant, right? Take that as an example. So, three consulting firms, they're competing, they need the smartest consultant. If they're charging 200 bucks an hour, the difference between spending three bucks on a cheap model or 15 bucks on an expensive model to replace a $200 an hour consultant, it's just irrelevant. That inference cost difference is irrelevant. If you're getting something that's bulletproof for 15 bucks, and so I think that's what we're seeing play out. The best evidence for all of this is just revenue growth. I'm talking about what is Anthropic's revenue growth compared to OpenAI, compared to the open-source models.

Millions of independent actors are choosing every single day. The open-source companies are growing, right? >> Yeah. >> But they're growing selling something that is really, really cheap. And there's room in every single market for premium products, for mid-tier products, and for commodity products. And I think we see a lot of this token growth. People are speculating that the intelligence gap between that commodity stuff and the frontier stuff is going to collapse to the point that people won't pay for the frontier stuff. There is no evidence of that on the field today.