YouSaid · the spoken record

Clay Bavor

lines on the record: 66
first: 2026-07-04
most recent: 2026-07-04
sittings or episodes: 1
sources: podcast

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“Part of the driver of the difference is probably the willingness of Chinese companies to do scaled distillation of the frontier models from the labs. My impression is many of the models, the open weights models coming from China are derived from training runs done in the US. I think if you have the US-based labs and hyperscalers developing the frontier models, there's an obvious, are they going to compete with themselves and drive price pressure on the frontier models by developing and releasing open weights models that are of similar capability? If I was running that business, that's not something I would do. So if you can't build frontier models yourself, okay, maybe the next best approach is to distill them and offer them up. I think that's probably the main driver of the difference.”
2026-07-04 · The Twenty Minute VC · 20VC: Open Models vs Frontier Models: Who Actually Wins? | The $100,000 Token Budget Every Engineer Will Need | Why Forward-Deployed Engineers Are the Future of Enterprise AI with Clay Bavor, Co-Founder of Sierra · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, it certainly wouldn't alleviate it. I think it will make some consumer applications much better. But I mean, the reality is you need petaflops, exaflops of computers, certainly for training, and you want a whole bunch of compute quickly at inference time. And you just run into thermal limits on your phone. I do think it is shocking that we're all carrying around in our pockets hypercomputers these days. And will they get better? Yes. Will you have language model optimized hardware rolling out in our phones, in our computers? Yes. I can see a sort of home appliance, which is, you know, you plug into the mains and you get on-demand access to a whole bunch of compute for things in your home. And maybe that helps alleviate some of it. Certainly for frontier workloads, though, it's like there's one place you can go to for that. And it is a giant rack of TPUs or GPUs in a data center somewhere.”
2026-07-04 · The Twenty Minute VC · 20VC: Open Models vs Frontier Models: Who Actually Wins? | The $100,000 Token Budget Every Engineer Will Need | Why Forward-Deployed Engineers Are the Future of Enterprise AI with Clay Bavor, Co-Founder of Sierra · IDENTIFIED FROM THE TRANSCRIPT · source
“I believe that. And I think that makes the point, which is okay, open weights models will be cheaper because you're kind of avoiding some of the margin stack in the hosted frontier models. Okay, but what is the fundamental input? It's GPU capacity, its power. That's still constrained.”
2026-07-04 · The Twenty Minute VC · 20VC: Open Models vs Frontier Models: Who Actually Wins? | The $100,000 Token Budget Every Engineer Will Need | Why Forward-Deployed Engineers Are the Future of Enterprise AI with Clay Bavor, Co-Founder of Sierra · IDENTIFIED FROM THE TRANSCRIPT · source
“Migration of certain workloads to open weights models. I think one of the drivers that's hard to predict how will play out across both the open weights models and the frontier models is just the availability of compute. And it's classic economics. It's microeconomics 101, supply, demand, if you have unbounded demand for frontier level intelligence or GPUs to run open weights models and the rate limiter is the number of blackwells and H100s you have, you end up with kind of a floor on the cost of tokens because you've got to pay for the energy, you've got to pay for the compute.”
2026-07-04 · The Twenty Minute VC · 20VC: Open Models vs Frontier Models: Who Actually Wins? | The $100,000 Token Budget Every Engineer Will Need | Why Forward-Deployed Engineers Are the Future of Enterprise AI with Clay Bavor, Co-Founder of Sierra · IDENTIFIED FROM THE TRANSCRIPT · source
“You miss one thing in there, which is a large amount of token use is driven by reasoning models now, right? Thinking out loud to themselves. And I think actually one of the most underrated developments of the past few years was the 01 model from OpenAI in late 2024, where if you recall there was a chart that showed, okay, test time compute or amount of inference done, amount of thinking out loud and performance, and it just keeps going up into the right. It's logarithmic, so it starts to level out. But it effectively demonstrated is if you have enough time and compute, the model will be that much smarter. So as for what happens with token economics, I think there are many drivers underneath it. One is you're going to end up with hardware that is able to produce more tokens of at equivalent cost. And so kind of the cost of the inputs, so to speak, will go down. We talked about, I think you'll have this mic.”
2026-07-04 · The Twenty Minute VC · 20VC: Open Models vs Frontier Models: Who Actually Wins? | The $100,000 Token Budget Every Engineer Will Need | Why Forward-Deployed Engineers Are the Future of Enterprise AI with Clay Bavor, Co-Founder of Sierra · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think if you look at what percent of enterprise tasks are completely automated today, it's a rounding error. It's very low. So is that a model gap? Is that a diffusing the technology into the company? Is that an application layer gap? I think it's probably all of these. You're obviously correct that as the open weights models become more capable, the set of things they can do grows larger, the set of things where all else being equal if they're much less expensive, that you would want to point a frontier model becomes smaller. But again, I think we're not imagining just how high the ceiling is in terms of demand for frontier intelligence, invention, discovery, building new products, building new services. I think it's hard to get your mind around when you have intelligence that can work around the clock to invent, to build, to discover how you would use that and how much of it you could use.”
2026-07-04 · The Twenty Minute VC · 20VC: Open Models vs Frontier Models: Who Actually Wins? | The $100,000 Token Budget Every Engineer Will Need | Why Forward-Deployed Engineers Are the Future of Enterprise AI with Clay Bavor, Co-Founder of Sierra · IDENTIFIED FROM THE TRANSCRIPT · source
“And therefore, the frontier models. That said, there will be an assembly line of cool, GPT four, which in March, April, May of 2023 was good enough to do some set of things is now 1 300th the cost for an intelligence equivalent token. And so you'll have some assembly line of taking models that were once at the frontier to perform certain workloads and then build open weights fine-tuned models for those. And I think you'll end up with companies using both mixing and matching them depending on the task at hand.”
2026-07-04 · The Twenty Minute VC · 20VC: Open Models vs Frontier Models: Who Actually Wins? | The $100,000 Token Budget Every Engineer Will Need | Why Forward-Deployed Engineers Are the Future of Enterprise AI with Clay Bavor, Co-Founder of Sierra · IDENTIFIED FROM THE TRANSCRIPT · source
“I think it's a lot more complicated than that. If you asked any software company, would you like to upgrade your staff level software engineers to principal or distinguished level software engineers? Yes or no, a hundred out of 100 would say, yeah, that sounds pretty great. So I think we have not yet appreciated the unbounded demand for call it frontier levels of intelligence. And now you don't need that in every domain. For instance, in our own, we build AIs for companies to interact with their customers. You don't need mythos to return a pair of shoes, right? Like you're good. It's like you want to do that well, but we've got some capability overhang, so to speak, for doing something like that. But in a range of domains, coding certainly science, material science, legal, right, where the stakes are very high, there's a high degree of complexity, I think we're going to see effectively unbounded demand for greater levels of intelligence.”
2026-07-04 · The Twenty Minute VC · 20VC: Open Models vs Frontier Models: Who Actually Wins? | The $100,000 Token Budget Every Engineer Will Need | Why Forward-Deployed Engineers Are the Future of Enterprise AI with Clay Bavor, Co-Founder of Sierra · IDENTIFIED FROM THE TRANSCRIPT · source
“Not going all the way down to the mega cluster training runs. And I think it's important that you are in control of your own destiny enough and that you don't tell yourself a story that you need to go further than you actually need to do.”
2026-07-04 · The Twenty Minute VC · 20VC: Open Models vs Frontier Models: Who Actually Wins? | The $100,000 Token Budget Every Engineer Will Need | Why Forward-Deployed Engineers Are the Future of Enterprise AI with Clay Bavor, Co-Founder of Sierra · IDENTIFIED FROM THE TRANSCRIPT · source
“A great question. We did briefly and discarded it. If you recall at the time, so late 22, early twenty three, as a startup in AI, you were kind of nobody if you weren't doing your own pre-training and building your own foundation models. Character, inflection, adapt, great people at these companies, but the capital expense, the ongoing capital expense to create what is effectively a highly perishable bag of floating point numbers just doesn't work for any but a small number of companies. And so our calculus was for areas that are deeply capital intensive. How do we slipstream behind the investments that the labs that the hyperscalers are making take as much as we can off the shelf while still being willing to engineer more deeply? So today we have a set of our own proprietary fine-tuned models, but these are fine-tuned ones on top of open weights models.”
2026-07-04 · The Twenty Minute VC · 20VC: Open Models vs Frontier Models: Who Actually Wins? | The $100,000 Token Budget Every Engineer Will Need | Why Forward-Deployed Engineers Are the Future of Enterprise AI with Clay Bavor, Co-Founder of Sierra · IDENTIFIED FROM THE TRANSCRIPT · source
“It's such an interesting question. Of course, the scale of two and then 10 and then 100 person enterprise software company is very different from, I think when I left Google, it was roughly 150,000”
2026-07-04 · The Twenty Minute VC · 20VC: Open Models vs Frontier Models: Who Actually Wins? | The $100,000 Token Budget Every Engineer Will Need | Why Forward-Deployed Engineers Are the Future of Enterprise AI with Clay Bavor, Co-Founder of Sierra · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. Well, I started counting in colleges. Gosh, I've been there one college, two colleges, three colleges, four colleges. Yeah. It's a long run. It's even more terrifying. It's a long run.”
2026-07-04 · The Twenty Minute VC · 20VC: Open Models vs Frontier Models: Who Actually Wins? | The $100,000 Token Budget Every Engineer Will Need | Why Forward-Deployed Engineers Are the Future of Enterprise AI with Clay Bavor, Co-Founder of Sierra · IDENTIFIED FROM THE TRANSCRIPT · source
“Deserved and got to work on just truly fascinating things. And so just incredibly happy and engaged and growing as a person and professional. And then in late 22, kind of the planets aligned in a way that I didn't think that they would probably align again. I'd always wanted to start a company. I started a very modest company when I was 13 years old and always thought I would start another. And if you're going to start a company with someone, you want to make sure that they're excellent in competence and in character. And then that the timing is right. And we could see that language models were going to be a thing. And if ever, you know, there's a time when the proverbial deck of cards are shuffled in the favor of smaller companies. It's when you're at the advent of the new technology. and took the leap and we're, I don't know, three years in change in now.”
2026-07-04 · The Twenty Minute VC · 20VC: Open Models vs Frontier Models: Who Actually Wins? | The $100,000 Token Budget Every Engineer Will Need | Why Forward-Deployed Engineers Are the Future of Enterprise AI with Clay Bavor, Co-Founder of Sierra · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so Brett and I met 20 years ago. We both started our careers in the associate product management program at Google. He was class one. I was class three. We met in the context of some kind of shared project that we were assigned to and kind of hit it off and ended up staying in touch socially through mostly a monthly poker group that in a good year might play two or three times, so not quite monthly, and had always wanted to work together and almost did a couple times. I think when Bratt left, I can't remember if it's for friend feed or quip, tried to get me to join that. The short answer is twofold. One, I just loved my time at Google. Culturally, it was me. I learned more than I can ever imagine having learned in those years. The people were so extraordinary to work with. And I had a series of managers and leaders I got to work with who took bets on me, gave me on paper at least, more responsibility than I did.”
2026-07-04 · The Twenty Minute VC · 20VC: Open Models vs Frontier Models: Who Actually Wins? | The $100,000 Token Budget Every Engineer Will Need | Why Forward-Deployed Engineers Are the Future of Enterprise AI with Clay Bavor, Co-Founder of Sierra · IDENTIFIED FROM THE TRANSCRIPT · source
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2026-07-04 · The Twenty Minute VC · 20VC: Open Models vs Frontier Models: Who Actually Wins? | The $100,000 Token Budget Every Engineer Will Need | Why Forward-Deployed Engineers Are the Future of Enterprise AI with Clay Bavor, Co-Founder of Sierra · IDENTIFIED FROM THE TRANSCRIPT · source
“We have not yet appreciated the unbounded demand for, call it frontier levels of intelligence. Part of the driver of the difference is probably the willingness of Chinese companies to do scaled distillation of the frontier models. If you can't build frontier models yourself, Okay, maybe the next best approach is to distill them and offer them up. Every one of our rounds, we actually Guided to and took a lower price than we could have. Some of our most effective employees at the entire company. Are 22 or 23 years old and have been completely AI pilled. We completely changed our engineering interview process.”
2026-07-04 · The Twenty Minute VC · 20VC: Open Models vs Frontier Models: Who Actually Wins? | The $100,000 Token Budget Every Engineer Will Need | Why Forward-Deployed Engineers Are the Future of Enterprise AI with Clay Bavor, Co-Founder of Sierra · IDENTIFIED FROM THE TRANSCRIPT · source