All three Hyperscalers ( $Amazon.com(AMZN)$ $Alphabet(GOOG)$ $Microsoft(MSFT)$) reported earnings this week. There was one quote from this earnings cycle that I think will get a lot less attention than it deserves. It came from Satya: “The basic transformation of any per-user business of ours - whether it is productivity, coding, or security - will become a per-user and usage business. That is the best way to think about it.” Big statement! The per-seat licensing model is the foundation that the entire modern SaaS industry was built on. It’s how so many IT budgets are structured. It’s how every renewal conversation goes. It’s how every comp plan is designed. Did

$NVIDIA(NVDA)$ I’m a perpetual optimist. It’s hard for me to see the world through any other lens! Sometimes I’m naive, but overall I think it’s a better way to live (and, generally, hard to bet against humanity’s resilience). One of the larger debates surrounding AI relates to the impact it will have on employment. One side (booo, the pessimists!) argues we’ll see a collapse in employment as AI takes everyone’s jobs. The other side argues some form of “Jevon’s paradox” - with massive positive economic benefits. Given my intro, I think it’s clear what side of that debate I fall on! There are many ways I’ve framed this in the past (I think I’ve even written about it in a prior week’s edition). However, I heard Jensen recently articulate it much mor

What a week for security breaches... Claude Code source code leaked via a misconfigured npm package, exposing 500,000 lines of code and an entire unreleased feature roadmap. Mercor got hit through a compromised LiteLLM dependency, with Lapsus$ claiming 4TB of stolen data including source code, databases, and contractor video interviews. And the axios npm package, one of the most widely used libraries in JavaScript with 100 million weekly downloads, was hijacked by state actors who injected a cross-platform remote access trojan. All within about 48 hours. The common thread? Trust in the software supply chain (and soon to be agent supply chain…) is incredibly fragile. A single misconfigured file, a single compromised maintainer account, a single poisoned open-source dependency...and the whol

One thing I’m starting to believe - the companies who figure out pricing and packaging the fastest will have a big edge in the early days of this AI phase shift. I think it’s one of the hardest problems right now for any AI company! What makes pricing so difficult in an entirely new (and expensive) line item has entered COGS - inference. Whether you’re paying OpenAI / Anthropic directly, or paying someone else to run open source models, inference costs are exploding (and we’re just getting started….). A big question becomes - how can you price your product such that you don’t torpedo your business into perpetual negative gross margin land (or said more positively, how can you price your product to more tightly align with value delivered). A couple weeks ago I wrote a post titled “Get in th

Every week I meet with founders building in the agent space. And lately, I keep hearing the same concept come up over and over - digital twins (or some version of this). When a concept starts showing up as frequently as this one, my ears generally perk up. Digital twins are the thing perking up my ears! And I think they’re about to become one of the most important concepts in AI. I think they could become a layer that helps scales AI to the masses (and consumption of AI). So what actually is a digital twin? The term originally comes from manufacturing. You’d build a digital replica of a physical asset (a jet engine, a factory floor) to simulate and monitor it. With AI it’s the same core concept, but with a totally new application. In the AI era, a digital twin is just representing knowledg

There seems to be endless debate around AI companies, and whether they have “upside down P&Ls” that will forever lose money, or if they will turn into cash cows in the future. Whether this sentiment is pointed at the large labs like OpenAI and Anthropic, or upstarts like Cursor, I hear it all the time! And I can’t tell if the bears just want to confirm their priors on AI negativity, if the bulls just have blind naive optimism, or if anyone really has a pov grounded in real analysis. As an early stage VC I certainly fall into the “perpetually optimistic” camp, so you can apply the appropriate filter to this post :) But for this post I wanted to focus on the profitability debate centered around the large labs, and why I think they’ll turn into wildly profitable business. There’s three ma

As always, these posts are more of a brain dump of “what I’m thinking” about…And lately I’ve been thinking about a pattern that keeps showing up when I study the biggest infrastructure winners of the cloud era, and what it means for AI companies today. Here’s the general idea: the biggest infrastructure winners of the cloud era monetized the core consumption primitive of the platform. In the cloud era, that primitive was compute, storage, and network I/O. In the AI era, it increasingly looks like tokens. Let’s unpack. When cloud computing first started taking off, the core primitive of the platform was very clear: compute. Everything that happened in the cloud ultimately boiled down to compute cycles running somewhere inside a data center. Storage, networking, and databases all mattered of

By now I’m sure everyone has seen Jack Dorsey’s tweet. For those who haven’t seen it (or don’t care to read it), he announced a ~40% headcount reduction at $Block, Inc.(XYZ)$ (formerly Square). This is a massive move… You rarely see headcount reductions this large. Throughout the post he used the word “intelligence” - which really can be replaced with “AI.” “we're already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company. and that's accelerating rapidly” and later: “we're going to build this company with intelligence at the core of everything we do.” I’ve broadly seen two different reactions to thi

Last week I wrote a post titled “Software is Dead…Again.” Since then, $iShares Expanded Tech-Software Sector ETF(IGV)$ is down ~20% (in just 1 week!). If software was dead a week ago what is it now, down an incremental 20%?! First - some fun stats The median NTM revenue multiple (cue all the comments “he’s still talking about revenue multiples?!?”) is 3.6x. This is the lowest it’s been in the last 10+ years. For the revenue multiple haters, the median FCF multiple is 16x NTM FCF, for median growth rate of ~20% (alas, once again, cue another set of haters, saying none of the FCF is real and it’s all sitting in SBC). Can’t escape it, maybe software is a zero with no valuation support. Was good while it lasted. 39% of my software index is trading <

I have a growing conviction that 2026 will be the year of multi modal AI. There are a handful of trends all coming together at the same time that are set to converge. Multi-modal models get good enough. Inference is getting cheaper and faster (cost curve is important). And the real world starts showing up as first class input. I really believe AI will stop predominantly living in text boxes and instead in places humans actually are. For the last few years, AI has been overwhelmingly text first, and for good reason. Text was the fastest path to usefulness. It was easy to collect, easy to tokenize, relatively cheap to serve, and generally didn’t have the same latency requirements. If you were building an AI product in 2023 or 2024, starting with text was the rational choice. But text always

As always, these posts are more of a brain dump of “what I’m thinking” about…And lately I have been thinking a lot about “legacy SaaS",” systems of record, etc. I wanted to write another post today in a similar vein.When I think about how people and companies interact with software today (and for this post when I say software I’m talking about legacy SaaS systems of record) the pattern is generally pretty simple. The system of record is a single, organized place where a human goes to look something up, understand the state of the world, and then take some sort of action based on the information they gathered from the system of record. Like opening Salesforce to check pipeline before updating a forecast, or pulling up NetSuite to reconcile numbers before approving a close. And more often th

I have been thinking a lot lately about education in AI. More often than not, I am seeing education as a core go to market problem (but sometimes an advantage) in AI. The companies that are best able to educate the world and their prospects are winning. Part of the reason for this is that everything in enterprise AI is still so new. Many people, teams, and organizations are facing what I think of as a blank canvas problem. They know AI is powerful, but they don’t even know where to start. Where to use it, where to augment existing workflows, where to create net new workflows, etc.What surprises me the most - even when teams think they know what functionality they want build, it’s not obvious to them how to build it. Build versus buy is just where it starts. Even inside “build,” there are d

Every AI conversation eventually drifts toward the same set of questions. Which model should we use. Build or buy. How much will inference cost. What happens to accuracy at scale. These are all real questions, but they are also strangely orthogonal to whether AI actually changes anything meaningful inside a company. You can answer every one of them well and still end up with an AI strategy that feels impressive in demos and immaterial in practice.There is a more important decision sitting underneath all of this, and most companies are not talking about it directly. They are making it implicitly, often without realizing it. That decision is whether AI is allowed to be authoritative or merely assistive.Most enterprise AI today is firmly in the assistive bucket. AI drafts the email, but a hum