Labs will dominate most verticals: open-source quality is just a lagging distillation indicator
abhiadesai · x · 2026-10-25
- Abhi Desai argues that beyond data, compute, and vital physical inputs (critical minerals, factories, bio labs, energy), frontier labs will win most verticals, since they can compete in anything at the marginal cost of compute.
- Quoting Mercor CEO Brendan Foody: labs will hesitate to release models due to safety concerns and distillation, forcing them to compete directly across finance, law, drug development, and other verticals.
- On open source: OS quality is largely a lagging indicator of how easy distillation was six months ago. As labs lock down models and enter verticals, distillation gets harder and enterprise buying decisions tilt toward labs.
- Takeaway: don't worry about lab revenue projections.
Related event: Analyst: Markets Underestimate Big AI Labs' Path to Dominance(2 posts)→
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