# Brendan Foody: AI models are the core product, hiring top talent costs tens of millions, and strong client relationships are key during crises | 20VC > Source: > Published: 2026-06-06 00:58:18+00:00 # Brendan Foody: AI models are the core product, hiring top talent costs tens of millions, and strong client relationships are key during crises | 20VC Mercor's rapid growth highlights AI's transformative impact on cybersecurity and the future job market. ## Key takeaways - AI models are increasingly seen as the core product, making software defensibility challenging. - Hiring top AI researchers is costly, often requiring tens of millions in stock annually. - Security incidents can be managed effectively with strong customer relationships and clear communication. - Competitive dynamics often fuel negative public commentary against companies. - AI advancements are likely to drive a new era in cybersecurity solutions. - Despite rumors, relationships with major clients like OpenAI remain robust. - Misconceptions about hiring practices can be clarified with direct communication. - The future job market will see both new opportunities and significant displacement due to AI. - Measuring AI’s impact on job tasks helps in understanding its role in different professions. - Economic incentives can lead to exaggerated negative perceptions on social media. - AI’s role in cybersecurity is expected to grow as threats become more sophisticated. - Job displacement from AI will be counterbalanced by the creation of new job roles. ## Guest intro Brendan Foody is the Founder and CEO of Mercor, an AI data provider that works with leading labs including OpenAI. Under his leadership, Mercor has reportedly scaled from $1 million to $500 million in revenue in 17 months and reached a valuation of about $10 billion. ## The challenge of building defensibility in AI software - Building defensibility in the software layer on top of the models is going to be incredibly difficult — Brendan Foody - AI models are increasingly recognized as the primary product. - The software layer’s defensibility is challenging due to rapid advancements in AI. - Companies must focus on the model itself as a core asset. - The AI landscape is evolving, emphasizing the importance of models over software. - Everyone has increasingly realized that the model is the product — Brendan Foody - Sustainable software solutions in AI require innovative approaches. - The competitive landscape in AI is driven by the model’s importance. ## The high cost of AI talent acquisition - Hiring top AI researchers can cost tens of millions annually. - How much does it cost to hire a high-quality AI researcher? Oftentimes it would be in the tens of millions of stock per year — Brendan Foody - The competitive landscape for AI talent is intense and costly. - Companies must invest heavily in talent to remain competitive. - High operational costs in AI are driven by talent acquisition. - The demand for AI expertise continues to drive up costs. - Understanding talent costs is crucial for AI industry stakeholders. - The investment in AI talent reflects the industry’s growth potential. ## Navigating security incidents and public perception - Macaw effectively managed a security incident and expanded its revenue. - There was an incident… the company’s been crushing it ever since — Brendan Foody - Strong customer relationships helped Macaw navigate the crisis. - Having really strong relationships with customers gave us a lot of confidence — Brendan Foody - Public perception on social media can be exaggerated. - Clear communication and understanding of incidents are crucial. - The company’s growth post-incident highlights effective crisis management. - Maintaining customer trust is key during security challenges. ## The influence of competitive dynamics on public perception - Economic incentives drive negative commentary against companies. - There are often a lot of people with economic incentives… who will absolutely trounce you — Brendan Foody - Competitors can influence public perception through negative commentary. - Companies must manage their reputation amidst competitive pressures. - Understanding motivations behind public commentary is essential. - Reputation management is a critical aspect of business strategy. - The competitive landscape shapes public narratives about companies. - Companies face challenges in countering negative perceptions. ## The future of cybersecurity driven by AI advancements - A golden age of cybersecurity is anticipated due to AI advancements. - There’s going to be an enormous boom in AI security engineering tools — Brendan Foody - AI is expected to enhance cyber defense mechanisms. - Increasing threats drive the need for advanced cybersecurity solutions. - AI’s role in cybersecurity is becoming more prominent. - The future of cybersecurity will be shaped by AI innovations. - Companies must prepare for evolving cyber threats with AI tools. - AI-driven cybersecurity solutions are crucial for protecting businesses. ## Strengthening relationships with major clients - Relationships with clients like OpenAI remain strong despite rumors. - Our relationship with OpenAI is stronger than ever — Brendan Foody - Rumors of losing customers are unfounded. - Maintaining strong client relationships is vital for business success. - Clear communication helps dispel misconceptions about client dynamics. - Partnerships with major clients are crucial for growth. - Companies must address rumors to maintain client trust. - Strong client relationships drive business resilience. ## Clarifying misconceptions about hiring practices - No offers have been extended to team members from Micro One. - We have not extended a single offer to someone from Micro One — Brendan Foody - Misconceptions about hiring can be clarified through direct communication. - Competitive dynamics influence perceptions of hiring practices. - Companies must address rumors to maintain transparency. - Accurate information is key to managing public perception. - Hiring practices are often misunderstood in competitive industries. - Clear communication about hiring strategies is essential. ## The impact of AI on future job markets - AI will create more jobs in the future but also cause displacement. - There’s certainly going to be many more jobs in ten years… but there’s also gonna be a lot of job displacement — Brendan Foody - Understanding AI’s impact on jobs is crucial for workforce planning. - Job displacement will be a challenge amidst AI advancements. - New job opportunities will emerge as AI evolves. - Measuring AI’s impact on job tasks helps in workforce planning. - Companies must prepare for changes in the job market due to AI. - Balancing job creation and displacement is a key challenge. ## Measuring AI’s impact on job tasks - Initiatives like the AI Productivity Index help measure AI’s role in jobs. - We’re building a ton of initiatives… measuring across all the different popular job categories — Brendan Foody - Understanding AI’s capabilities and limitations is crucial for planning. - AI’s role in different professions varies significantly. - Measuring AI’s impact helps in understanding workforce dynamics. - Companies must assess which tasks AI can automate. - Proactive approaches to AI’s role in jobs are essential. - Understanding AI’s limitations is key to effective workforce planning. **Disclosure:** This article was edited by Editorial Team. 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