Application Layer

“The doom is very much contained to the frontier lab work. Everyone in the application layer who's applying the models, diffusing them, they're like, I just, I can't get this thing to work right. I gotta get forward deployed engineers to teach people how to use…”

“I think that the application layer is going to be a much harder battle because being model locked is actually a huge disadvantage if you're trying to sell outcomes.”

“Instead, we've seen the very opposite, which is yes, they are vertically integrating, but they're vertically integrating down into inference and compute.”

“It's actually logical now in hindsight, because the workloads for inference are very homogeneous, so you can build enormous scale in one part of the value chain. Whereas when you think about the application layer, you know, you've got so many idiosyncrasies an…”

“This is a place where the application layer really shines because labs, of course, are both incentivized and structurally only able to provide their own in-house models. You as an application sort of aggregator can provide the best of breed.”

“If, like, inference is going to commoditize, then, of course, the next best thing is for the model providers to be moving up the application layer in order to own more of the application stack so that they ensure that they're not commoditized and they're getti…”

“And the velocity at which it's happening, you see that the real business model is not in the foundational model anymore. It's at the application layer above, and it's in the infrastructure below, whether that's the cloud or whether that's chips.”

“I do think over time, today a lot of the value has been accrued in the infrastructure and model layers. I do think over time we'll start seeing value getting accrued in the application layer.”

“We absolutely are not going to move into application layer. Very clear to us.”

“I think we're also now playing in a world where there will be a proliferation Of startups and apps at the application layer that are less capital intensive.”

“Because AI is moving so fast, I don't think the products are fully there yet. Like the enterprise products at the application layer don't exist in their entirety because we haven't been tested against the enterprise ask.”

“We think the application layer, well, A, it always comes later. So, you know, the first three or four years of the iPhone, and then the applications really took time. So maybe it's just starting.”

“And so I feel like building defensibility in the software layer On top of the models is going to be incredibly difficult. Whereas on the other side of things and the infrastructure side, it feels like there are meaningful moats that are getting built.”

“I could build a software product in like two weeks. That would have taken me two years. So that's going to massively increase the pressure on the application layer.”

“Keep the government out of the application layer. Focus on the energy layer. Just work on driving down energy prices and let all the tech companies duke it out and they will be benefit beneficiaries of cheaper energy”

“Unfortunately in the application layer, it is not as crazy as, you know, the metas and the opening eyes who are just like, there's only so many top level researchers.”

“I would not recommend most companies like go out and start a new model program. Like, I think there's just too many opportunities at the like application layer right now.”

“It is a rare moment in history where your technology is so far ahead of the application layer that there is so much that we need to do here to catch up.”

“And even though a lot of the PR excitement and hype has been on these technology layers, it turns out that almost by definition, the biggest opportunities have to be at the application layer. Because we actually need the applications to generate even more reve…”

“We're very high conviction that at the application layer you will have tremendous value and at the chip layer you will have tremendous value.”

“This is why I think Like model companies are not guaranteed to win the application layer because you have to work on all these boring things.”

“So at this point, then most of the value is probably not going to accrue at purely the, at least this is our belief at the infrastructure layer, it's going to accrue somewhere else. Where is the layer that you can actually differentiate on? And we believe the …”

“I think the conversation changed for the healthier with Deep Seek, because it poked a hole in the potential value right, the flip side of this, the commoditization of the LLMs, and so it put a lot more focus and attention on the application layer, and it, I th…”

“Value is accruing beneath, like at the chip layer, because everyone is spending insane amounts of money on chips to build these models in the first place, and then above, at the application layer, where you see stuff like let's say ChatGPT, which is charged on…”

“For the application layer, can you eventually take over a workflow? What is the workflow that you're enabling? Because really what you want is if you swap in and out underlying models, you're still sticky somehow, and a model improving doesn't commoditize you,…”

“If the analogy holds, as an investor, the odds of success are going to be significantly higher at the application layer because the diversity of needs there is greater.”

“Foundation models, 90%. Application layer, 70%. And in the incumbents, the value going into the incumbents, only 20%.”

“I focus on the application layer because I do think that's where a tremendous amount of value ends up being captured and created.”

“It feels like a lot of the value is actually going to be captured and retained through that application layer in, in a way that is maybe not entirely different from the cloud vendors.”

“If you believe all of the value is going to aggregate in a very small number of underlying models and platforms, that may be correct, but I think what you're hearing here is there's a tremendous amount of excitement around application layer and point solution …”

“A lot of the value that has been built in software over the last 20 years has actually been in the application layer that takes these breakthroughs and just verticalizes them for a specific use case or a specific customer demographic and monetizes them.”

“I have to believe it's gonna accrue mostly to the application layer. I think if you think about infrastructure companies as platforms, you know, if you think about the software market as the relatives, the value of AWS and Microsoft and Google cloud versus the…”

“There's very little lock in at the application layer. So workflow apps, which effectively is what most of these enterprise software things are. Are very copyable because there's nothing that really locks it in.”