David George

There are some head fakes that we've seen of things that grow really fast and then they fall off and they're experimental.

So the things that have durable behavior, things like cursor, where the users really, really use it and ideally or increasingly use it over time.

Harvey is an example of a company where as the models have gotten better, customer engagement and usage has actually really grown significantly.

It actually took a step change, which we've seen, which is interesting to see because it happened at the same time as the reasoning breakthroughs.

We were like, oh, that makes sense, actually.

Lawyers need to reason.

And it turns out models got really good at reasoning and people use the products a lot more.

So ease of customer acquisition, the behavior that we observe on customer retention engagement, and then there's gross margins.

And we give a little bit of a pass on gross margins right now.

We're in this funny environment where late stage SaaS cloud

We would look at a company and it's like, oh man, if you're not 70% plus gross margin, you're not really a SaaS business or cloud business, whatever.

And that's going to be a knock and people will trade you differently.

And that's when you get valued as revenue versus gross profit or whatever.

Now it's like a badge of honor to have low gross margins because we're like, oh, at least people are using your AI products.

We get these pitches and they're like, I'm an AI thing and I got 75% gross margins.

I'm like, well, no one's using the AI stuff then.

That doesn't really seem like an AI product to me.

So we give a little bit of a pass on that.

The expectation is the cost is going to continue to go down.

Just the inference cost.