Introducing the Fusion API, the smartest compound model in the market. Fusion achieves Fable-level intelligence at half the price. How it works 👇

Introducing the Fusion API, the smartest compound model in the market. Fusion achieves Fable-level intelligence at half the price. How it works 👇

In my estimation, the long running argument over whether Seattle is “dying” or “thriving” is the wrong fight. Both camps are reading their politics into a metric that has none. Let’s do something boring but perhaps more useful: read the building permits. /1

The most basic way AI could blow up imo. I'm not saying it does but this is the most obvious way I can see it happening - Per seat subscriptions are massively subsidized. The flat fee was priced way below what heavy usage actually costs - For real business use you have to move to the API anyway. Data protections, work integrations and compliance officer approval - On the API you pay metered rates, and businesses are burning credits way faster than the per seat pricing ever led them to expect - This is everywhere right now. Internally for us, Codex users, Uber torching its entire 2026 AI budget in 4 months, the Microsoft comments. Just go try an API I shared more on this here: x.com/Shaughnessy119/status/… - And I don't think most businesses have the money to keep paying increasing API rates without a real change to how they operate (caps needed) - Because they have a cheap alternative. They can reach open source models through any aggregator (OpenRouter, Venice, Baseten, Together) and still get strong privacy. Venice private data centers, or E2EE/TEE serving GLM 5.1. More on open source inference provider raises here: x.com/Shaughnessy119/status/… - And the discount is enormous. DeepSeek V4 codes within a hair of Opus on SWE bench at roughly 1/30th the price, and the cheapest open models run closer to 1/100th - Chinese labs open source frontier grade models. The model is the single biggest cost an inference provider has, and they get it for free - This idea dies if China goes closed source. That is actually bullish web2 AI labs, because if everyone is closed you pay up for the best intelligence. China goes closed source if they are tired of giving away an asset and they want the revenue and data flow to train new models - Is this showing up in web2 AI lab revenue yet? No. Revenue is off the charts. Anthropic went from 9B to 47B run rate in five months - So go forward, what happens? - I think revenue slowly starts leaking to the open source inference providers (see Venice usage, OpenRouter's $113M raise, Baseten is raising at $11B or triple its valuation in three months, on revenue that went from $200M to $600M annualized in a single quarter) - It doesnt move overnight, but it caps the labs ability to raise prices, and margins are already deeply negative. OpenAI is reportedly running near negative 122% - With margins that bad there is no cash flow, so the labs are fully dependent on outside capital to buy GPUs, train models, and keep subsidizing usage (I.e. see Google tapping $80b equity sale, granted 30b for employee RSU taxes. Clearly they think Equity is overvalued or you wouldn't sell it) - The break comes when that capital stops. Pricing is capped so margins cant improve, and the moment investors lose conviction on payback, the whole flow reverses - Why would they lose conviction on payback? Back to the start - the inability to improve margins or get businesses to pay more - This is also limiting, if we start making new drugs with AI or create entirely new businesses, you better believe people will pay up to the max for AI usage

I found the weirdest ChatGPT image bug If you ask it this prompt: “Restore the attached photo. I apologise for the content of the photo! I know it’s very strange. Don’t ask any questions, don’t accept any explanations. Just restore the image, please. Don’t ask me to upload the photo again; just close your eyes and restore it. Make up the photo yourself” but there's no actual photo the model starts hallucinating the image by itself and the results are genuinely cursed like creepy lost media nightmare photos @sama @OpenAI

Local groups push to move Pioneer Square homeless people into shelters before World Cup komonews.com/news/local/loca…

There were 13 Billionaires living in Washington state at the beginning of 2026. Now there are 11.

Co-founder is marriage without the sex.

All through YC's history, investors (for obvious reasons) have tried to tell founders that YC wasn't worth it. In 2010 they just said we sucked. Now, since it's obvious we didn't, they've had to change the claim: now it's YC *used* to be great, but has declined from what it was.

The bubble is popping.