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“Previously, they had Image 1.5. Basically, it's really good at doing something that the last model, 1.5, was pretty bad at, which is rendering text. If you ask it for a poster, you know, it would always get this kind of like elfish looking, I don't know, the letters weren't that great. Anyways, 2 in their words is a step change.”

“He said that AI is now generating more than 65% of new code at Snap and the company expects to cut over $500 million in annualized expenses by the back half of this year. So they are cutting in a massive way. The stock jumped almost 8% on the news, and I think that tells you exactly how Wall Street is feeling about this tradeoff.”

“This is a very impressive case study. The company is called Reducto. They just announced their Series B recently, and they actually closed a fan company 154 days after the batch, which is, I haven't seen that happen. And this big fan company reached out to them because they did a YC launch. That's how they found them. So our launches get people watching them. And they reached out and they go, this is interesting, we'll love to try it. And we've been working on a solution. Turns out this particular company has been trying to, what Reducto does is document processing for AI. And this company has been having a lot of internal systems and build internal solutions for years to run a lot of the operations. And a lot of the solution, they tried open source, they tried AWS, Tesserac, all sorts of OCR solutions. And they were not cutting the mark. And this is where product excellence really got Reducto to win the deal and be a pretty big one.”

“Here's one other point from the study that I also thought was really interesting in terms of why enterprise is such a big opportunity for startups. I'll actually read this quote. This is from some enterprise buyer person. We're currently evaluating five different gen AI solutions, but once we've invested time in trading a system, the switching costs will become prohibitive.”

“The attacker actually broke into Context AI, which is an AI tool that Vercel, one of their employees was using. And from there, they got into that employee's Google workspace and from there into Vercel's environment. So there's kind of like this multi-step approach that they took in order to get in.”

“And there's a company that I worked with called Greenlight that also sells AI systems to banks, and they were telling me a story that is exactly along the lines of what Garry was talking about, where there is a bank that they were trying to sell to, and the deal fell through, because the bank had an existing relationship with Ernst & Young, who apparently builds all the software for the bank, which is apparently not that uncommon. And they're like, well, you know, we trust our vendor, Ernst & Young, we've been working with them for years. They say that they're going to build this AI system.”

“To be fair to IT consultants, Apple is very bad at software. You know, my favorite example is Apple of the company that can have infinite access to capital and infinite access to the smartest people in the world. All of us use iPhones, and I use the calendar app. I think you guys do too. We use it many times per day due to our schedules. And even the calendar app is a piece of trash. You know, you probably run into some sort of weird bug in that, like, almost every single day. So Apple, a company with infinite resources and infinite access to the smartest people in the world, cannot make a good calendar app. So, you know, if that's true for Apple, how could any normal company, let alone an internal IT system, let alone, like, Deloitte or Ernst & Young, like, very well-meaning people, but, like, you know, most of the time, the output of something like that is bad.”

“Yeah, so I read the tweet. The tweets are essentially, oh, Kapathi says agents are overhyped and can't do the work. So then I listened to the interview, and it's like the point he's making is, you can't just give an agent a prompt and expect it to do everything perfectly the first time. You still actually have to do lots of work to provide the right data and do all the correct context and actually do the evals and all the actual tooling. And my interpretation of that was, that's a fantastic opportunity for startups and anyone who can build software. Fantastic. There's tons of stuff that's still yet to build. And I just found it an interesting raw shark test almost. If you fundamentally want to believe that everything is overhyped, you're going to read into that, that, oh yeah, look, AI expert confirms it's overhyped. But if you listen to actually what he's saying, there's tons of opportunity to build really great tooling.”

“I've heard it's actually a particular archetype of big company employee. It's someone that really wants to do a startup or has always had dreams of a startup, but they're not actually ever going to do it. They're too risk averse. And so they can kind of live vicariously through an exciting startup with founders that they get along with. And if you find someone like that to be your champion, it's like they want you to succeed because they're going to feel like they're on the startup journey as well.”

“Engineering teams at these orgs are filled with people that themselves don't actually really believe in AI, don't use cogen tools, think it's all super overhyped, are really excited when an MIT study comes out saying that it's all like hype and retweeted, and really want because it's a narrative they want to believe. But the consequence of that for the companies is that they can't build the product. So if your engineers don't believe in this, then how are you going to build a product that actually works? The knock on effect for start-up centers, if you can actually build something that works, the enterprises will talk to you because they have no other options. You can't build it internally, you can't go to an established company, so the start-ups are actually getting the shot that they never had before.”

“Another good tactic is to find founders whose companies were acquired by big companies and get them to be a champion. With Triple Byte, we were able to work with Apple and almost no recruiting companies working with Apple, and that was all because of a YC company, Q, started by Robbie Walker and Danny Gross, actually, that had been acquired by Apple, and then they helped us get in there. And then, actually, I remember we got a pilot with Oracle through a founder who had sold his company to Oracle and was just pushing for them to hire better engineers and helped us through procurement and gave us all the internal politics and step-by-step playbook to get the pilot going.”

“Apple CEO Tim Cook is officially stepping down on September 1st, and John Tarnas is gonna become the CEO. This is really interesting. There's a lot of AI things at play for Apple, and they really haven't delivered on their AI promise.”

“As part of the settlement, Clarify has to delete the 3 million photos and any models trained on them. I think that this is something that is absolutely insane. For years, AI companies have been operating kind of in this gray area that, you know, they're like, well, if it was on the internet, we can use it. And the FTC just said, no, you actually can't.”