Karmel Capital Management

Karmel Capital Management LLC is a San Diego based alternative investment management firm founded in 2013. Views are My Own | Not Investment Advice

[Karmel Capital Management @KarmelCapital]

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strategy. Any opinions expressed in this material are subject to change without notice. Investing in securities involves the risk of loss and past performance is not a guarantee of future results.

[Karmel Capital Management @KarmelCapital]

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This material is intended for informational purposes only and should not be construed as individualized investment advice, nor should it be construed as an offer or solicitation with respect to the purchase or sale of any specific securities product, service, or investment

[Karmel Capital Management @KarmelCapital]

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Sources: @bg2pod "The SpaceX IPO, Fable 5, AI Capex Update & Market Check" + Karmel's mid-year brief "The Frontier Compresses." Podcast revenue/token figures are the panel's own framing, not independently audited.

[Karmel Capital Management @KarmelCapital]

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For capital allocation, one direction: own the stack and the compute. Avoid the squeezed middle.The number to watch: whether the frontier holds ~90% of revenue as its capability lead shrinks. When those lines diverge, the repricing follows.Full brief https://t.co/RQBEtFeduT

[Karmel Capital Management @KarmelCapital]

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The implication:A 90% revenue lead resting on a 3-month, fast-closing capability gap isn't built on capability. It's built on reliability, distribution, and trust — a far more contestable moat than raw intelligence.

[Karmel Capital Management @KarmelCapital]

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The panel put open-weight models ~6 months behind the closed frontier.Our mid-year research puts the gap at ~3 months — and shrinking. Down from ~12 a year ago.On coding it's basically gone: open weights 80.2% on SWE-bench Verified vs 80.8% frontier.

[Karmel Capital Management @KarmelCapital]

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On the latest @bg2pod, @altcap sat down with @GavinSBaker and Andrew Fox of Atreides Management and Altimeter's @_clarktang for the clearest frame on AI economics we've heard this year: value and volume have decoupled.

[Karmel Capital Management @KarmelCapital]

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90% of AI revenue accrues to the frontier.
~80% of tokens consumed are open source.Both true at once. Most people only hold one.Where the money in AI actually accrues — and why the closed frontier is less protected than its revenue share implies

[Karmel Capital Management @KarmelCapital]

In early 2025, the best open-weight AI models trailed the closed frontier by about a year. Today the gap is about three months. That's the thesis of our new mid-year Technology & AI brief, "The Frontier Compresses." Full read:

Full read:
https://t.co/qsXSD5zpQL