Own or Be Owned: Why Every Company Needs Its Own AI Model (Yash Patil, Co-Founder & CEO of Applied Compute)

**Yash Patil** (0:00)
There is truly some atrophying happening by relying too much on AI tools. The one thing I'm worried about people losing is this ability to actually deeply think about how things should be architected and designed. The best engineers right now are the ones who are like, learn how to code before AI, because at the end of the day, I think humans will be the overlords over all of these AI tools, and you will still need to do critical thinking to know what you wanna build. Palantir is one of the few companies that signs massive contracts without knowing if they can solve the problem. They will sign huge $100 million deals before they've started working out the problem.
I think we've been into that category where there's open research questions, and people who like to work on things that are uncertain are just naturally attracted to companies like AC. I know there's a lot of folks who are like, oh, 50% of jobs are gonna go away in the next two years. Personally, I think that is not going to happen. I think just the diffusion of AI into the real world take time.

**Mario Gabriele** (1:02)
Demand for intelligence is outrunning the chips that supply it. Meanwhile, tokens are being sold at subsidized prices that won't last, demand keeps climbing, and companies are discovering that using a frontier model for every task is like cooking with a blowtorch. Spectacular, and the wrong tool for most jobs. Yash Patil lives at the center of that squeeze. The 23-year-old ex-OpenAI researcher runs Applied Compute, a $1.3 billion company that trains custom models on a business' own data. Smaller, cheaper, and built for the work that that company actually does. One year in, and Yash's startup is already serving a mix of tech startups and established corporations, helping them enter the AI era all while owning their own intelligence. In this episode, we discuss why open-weight models are quietly taking over real workloads, why Yash believes AI's transformation of the economy will take decades rather than years, and what it was like inside OpenAI the weekend the board fired CEO Sam Altman. I'm Mario, and this is The Generalist. The best founders aren't spending their time on expense reports. They're busy building. Brex is the agentic finance platform that makes that possible. High-limit corporate cards, banking, and AI that handles the back office automatically, so your team never has to. Expenses get captured, books get closed, and spend stays in policy without anyone chasing it down.
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Yash, lovely to have you here.
We've been chatting already before we've kicked this off. I think it makes sense to maybe start with some of the things we were chatting about, if that's not good to you.

**Yash Patil** (4:03)
Of course. Yeah.

**Mario Gabriele** (4:04)
Yesterday, Fable 5 came out.
Big day in the world of AI and has implications for all of us, but including on the business you're running. I know you've got a few thoughts on it. What came to mind for you when you saw it?

**Yash Patil** (4:19)
I think, first of all, the model is amazing. A ton of our team members were using it. It clearly feels like a step function. I think there have been moments in time where we've seen better and better models, and this is definitely a point in time that should be noted. I think though, the thing that you're referring to is, when we were looking at the system card, and this was blowing up on Twitter and whatnot. Yes. There were some stipulations about how you could use the model, particularly some of the guardrails where the model might not answer in a super-intelligent manner or it might answer around particular types of questions. I think in the past, it's been focused on things that are very reasonable like safety concerns and things like that. Things that are consensus-view models, helping with this stuff is not great. But in this case, it was queries related to AI model development, which really sparked this question of how much control do the frontier model providers have and how you use these models.