20VC: Mercor CEO on Why Application Layer Companies Have No Defensibility, The Model is the Product | Token Spend Will Exceed Headcount Spend in 5 Years | The True Cost of Hiring AI Researchers in the Valley Today with Brendan Foody

**Brendan Foody** (0:00)
Building defensibility in the software layer on top of the models is going to be incredibly difficult. I think over the last two years, everyone has increasingly realized that the model is the product. We have the demand to double overnight. We just don't have the capacity. Like right now, we're spending more on tokens for our internal agents than we are on employee headcount. I think we're seeing in real time that services are getting automated. I could definitely see one of them being a $10 trillion company, maybe even significantly higher.

**Harry Stebbings** (0:34)
How much does it cost to hire a high quality AI researcher?

**Brendan Foody** (0:37)
Oftentimes, it would be in the tens of millions of stock per year.

**Harry Stebbings** (0:41)
This is 20VC with me, Harry Stebbings. Now, joining me in the hot seat state, we have Brendan Foody, co-founder and co-CEO of Mercor, one of the fastest growing AI companies, valued at over $10 billion today, doing over a billion dollars in revenue. Now, Brendan's done quite a few shows before, and so my question was, how do I get answers that he's never given before? How do I push and ask questions that no one's ever pushed him to ask before? This is the most revealing interview that Brandon has ever done, discussing core elements like, is revenue really revenue in this business? What does that look like moving forward? Would he rather invest in OpenAI or Anthropic? We do not shy away from the spicy question in this show, and Brandon was incredible and more than delivered. But before we dive into the show today, did you know that industry average for booking a business trip is 45 minutes? That's a massive waste of your team's time. Well, with Nivan, your employees can book a trip in just seven on average. Nivan is the AI-powered travel and expense platform designed for companies that value efficiency. It drives real business impact through high employee adoption and automated policy control. Now, the built-in AI approves in-policy bookings and blocks the rest automatically. This allows finance teams to stop chasing receipts and skip the month-end chaos. And you get this real-time visibility that can save your company up to 15% on your travel budget. And that's why leaders like Visa, Stripe, Figma and even Anthropic rely on Nivan these days. Go to nivan.com/20vctoday to see for yourself. And you'll get a chance to win two business class flights anywhere in continental US. No purchase necessary, rules apply. Head over to nivan.com/20vc now. Once Nivan simplifies the travel, Air Wallets simplifies the spend behind it. Founders, let's get real about the growth tax. You've raised VC funding and you're scaling globally. And it's no longer about shipping product. It's about orchestrating operations across continents. But suddenly, your payments and finance stack is choking your growth. You're logging into lots of different banking portals, waiting days for transfers and reporting across entities. It's operational drag and it's at your scale. It's costing millions. That's why I'm so excited to partner with Air Wallets. Air Wallets are more than just a banking alternative to HSBC or Citi. Air Wallets brings you an intelligent financial operating system that powers how global businesses operate and grow, allowing you to manage and automate banking, treasury, payments and spend. The most exciting part for me, they're heavily investing in agentic finance. If you're scaling globally, you need a banking and finance platform that's borderless, real-time and intelligent. Check out Air Wallets today and see how they're helping thousands of businesses like Canva, McLaren and Deal. Scale at airwallets.com/20vc.
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