Welcome to Cautious Optimism, a newsletter on tech, business, and power.
Tuesday. CO is off to NYC today. Please excuse our brevity. To work! — Alex
📈 Trending Up: Google Glass … good news … farm economics … crypto influence /r/overemployed … stealing your CFO … third-party smartphones … no shit … cancel culture … leopards …
📉 Trending Down: Granny … tech purgatory … Gemini’s legal issues … affordability … good guys winning … conditions in Gaza …
Things That Matter
Battle of the coding models: Yesterday, OpenAI dropped GPT-5-Codex, a version of its GPT-5 model built for use in its coding tool, Codex. Per CEO Sam Altman, it was quickly adopted by the Codex user base. Elsewhere, Grok’s Grok-Code-Fast-1 has completely stomped the competition over on OpenRouter, where the success of the recently-released coding model has soared to the top of the charts and produced 2.83 trillion tokens in the last month, the most of any model.
If 100% of those tokens were output tokens, xAI would have earned $4.25 million from known usage of GCF1 on OpenRouter since its launch.
Ah, we blinked: After TikTok was banned by Congress, and POTUS decided that the law didn’t apply, we’ve been in limbo waiting for some resolution of the application’s status in the United States. Now a deal is coming into focus, with the United States agreeing to allow for TikTok’s future spin-off to continue leasing its algorithm from its current, Chinese parent company. That was a key sticking point in the deal before, as China didn’t want to share or sell that key technology, and the United States wanted to avoid foreign influence of American kids. So much for that.
Picks, shovels: After Scale AI’s partial sale to Meta, its rivals have seen their businesses accelerate, inclding Invisible Technologies, which is busy raising $100 million. Data labeling for AI is becoming more niche, meaning it requires more expert inputs. Which is just what Invisible offers. Lots of value is accruing to AI model companies, startups building apps atop AI models, and, yes, in the background, the businesses helping keep the entire enteprise afloat.
Free Speech: In the last few day, we’ve seen more calls for the end of free speech from the government that I can ever recall. From POTUS saying that protestors may not have First Amendment protections, to the AG declaring that some speech is hate speech, and thus unprotected by our Constitution. The President is also suing the New York Times for $15 billion while one of his key advisors is busy calling his political rivals a “domestic, extremist organization,” and so on. This is the bad stuff that we should worry about.
Mercor Rising
Back in August, I interviewed Brendan Foody, the CEO and cofounder of Mercor. You can read/watch/listen to the full chat here, but the gist is that the startup has a plan to fix hiring. Here’s a condensed version of Foody’s vision:
Corporate hiring is inefficient because “when a company is considering candidates in the market, they can only consider a fraction of a percent of the people available that are looking for work.”
Similarly, when a candidate goes out to look for work, “they can only apply to a couple dozen jobs.”
Worse still, existing job boards (LinkedIn, Indeed), have “very broad distribution, but [only] aggregate [a] very thin layer of the person's resume.” Recruiters are useful, but they capture a huge chunk of value.
The solution? A centralized, automated service that can do the deep work of a recruiter, while maintaining the power of broad distribution. If someone could build that, they could build something truly huge, yeah?
That would be a big bite to chew all at once, so Mercor is focusing on higher-end workers, especially those who fit into an AI context (human data versus synthetic data, in essence).
Thus, Mercor is sometimes tagged as a recruiting service for AI model companies hunting up experts to help tune their products, its vision is much, much larger.
And the model is working. Per Foody, Mercor “scaled from $1-500M in revenue run rate in the last 17 months, making us the fastest growing company of all time.” Even more, Foody added that Mercor’s growth continues to accelerate, with:
11% week-over-week growth in July
18% week-over-week growth in August
19% week-over-week growth in September
Those are simply insane numbers, and put Mercor on one of the fastest growth trajectories I have ever seen. For reference, 19% growth against $500 million is $95 million.
The tricky bit will be taking Mercor’s current success in the part of the labor market it specializes in, and making the same model work for a far larger cohort of job types. But it’s hard to look at a company growing as quickly as Mercor is today, from so large a revenue base, and throw up much doubt.
Mercor has raised just $134 million, a paltry sum for a company of its scale.
Felicis, Benchmark, and General Catalyst are its three leading investors.
A fun coda before I pack up and head for a train: OpenAI is explicitly working on a jobs product for the AI-empowered. That’s not an impossibly large stretch from what Mercor is building. Perhaps we are catching the first whiff of future M&A in the air. Or perhaps Mercor will do us all a solid and go public. Q1 2026 would be a fun time to do so.