Great Point. Labs
A sharp thesis — though worth remembering that Mercor sells domain experts to frontier labs, so vertical specialization is literally his business. That said, the underlying logic tracks: distillation anxiety is already making labs more guarded with weights and outputs, and guarding value naturally pulls them down the stack.… more
The weak spot is distribution — labs have compute, but finance, law, and pharma incumbents own proprietary data, compliance, and client trust. The messiest part will be labs competing with their own API customers, a channel conflict the big labs are already navigating. If this plays out, the application layer becomes the next cycle's main battlefield.
this is a great point. labs will become more hesitant to release models because of safety concerns and distillation.
this will force them to compete directly with companies across finance, law, drug development, and many other verticals.
Source:
X — Brendan Foody
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