Ara Kharazian

So it's a very small share of actual spend that's happening.

But you project out that 13x and you get to an extremely unsustainable spend path, right?

Most businesses can't do that and probably shouldn't.

And it's those firms specifically that are increasingly shifting some of their AI spend over to platforms like OpenRouter.

So anything that would allow you to select between multiple models and ideally take advantage of free and open source models that are priced a little bit cheaper when they're deployed.

it's even that it's still a very small share of spend they've got like three percent of spend our platform goes directly through an open router versus an anthropic at least the ai spin on our platform but increasing and particularly concentrated amongst those firms that are most incentivized to use platforms like open router the ones that spend the most on ai

so they're finding the best value there and i think it's likely that those practices will start to move down the chain and be adopted by the more mainstream firm to start to opt for models outside of open my open eye and anthropics or you know use open eyes models and anthropics models but use something that routes them over to the cheaper options when that makes most sense for the task

So those are the main headwinds I see on the model companies.

Cost and competition, particularly from arguably themselves in terms of the cheaper models that are available and then also the open source versions available.

Yeah, you don't need the frontier model all the time.

I mean, oftentimes it's worse for what you want because it's expensive and slow.

You know, I find myself in my day to day oftentimes automatically routing things to the most expensive model, even though it's slower.

And I would actually prefer it just use Haiku or Sonnet when it's necessary.

But you can't expect the typical worker to make that decision.

I mean, my job is to be informed about AI trends, so I know all the new models that are coming out, and I'm relatively good about applying best practices, but that comes with a lot of tracking of the market.

I don't think that you can expect most American office workers or workers in general to do that.

And they shouldn't have to.

And the market hasn't caught up to that use case yet.

Open and Anthropic have no incentive to offer an auto routing product that allows you to lower your AI spend because they make money on tokens.

And by the way, they make more money on tokens than other AI frontier labs and firms like Google,