David George

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.

Inference cost is going to go down over time.

I mean, there's so many existential questions about market structure that will predict inference cost, but the history of technology would suggest that it's going to go down over time.

The cost of inference has gone down at the same time that reasoning happened.

And so token token usage has gone way up.

So you haven't yet seen any improvement in gross margins.