20VC: Mercor CEO on Why Application Layer Companies Have No Defensibility, The Model is the Product | Token Spend Will Exceed Headcount Spend in 5 Years | The True Cost of Hiring AI Researchers in the Valley Today with Brendan Foody
Brendan Foody is the Founder and CEO @ Mercor, one of the leading data providers to the largest labs on the planet including OpenAI. In the last two years, Brendan has scaled the company to $1.5BN in ARR and a valuation of $10BN.
AGENDA:
True or False:
Mercor lost Meta and OpenAI as a customer with the hack?
Mercor has been poaching competitor talent, paying them millions?
Mercor revenue is not real revenue and is only GMV?
12:56 Would Brendan sell Mercor for $30 billion?
14:23 Why everyone is wrong that AI will lead to labor displacement?
15:59 We will create many new jobs that do not exist with AI.
16:59 Why training agents will be a massive labor category that does not exist today
19:51 Will we see the data provider market unbundle and specialize into verticals?
22:24 Is the stated revenue really revenue or is it really GMV?
27:55 How a 1 million ARR company secured one of the best investors in the world with a helicopter ride
29:41 How Felicis secured the deal of the decade with a race track and a set of Ferraris
32:59 Which investment round felt like the highest price to grow into?
34:49 Why will value accrue to the infrastructure layer, not the application layer, in the next 12 months?
35:46 Why the model is the product and why application layer companies should be scared as a result
37:22 Why network effects will be the determinant of value creation
38:46 Why the forward-deployed motion, not the GTM motion, will determine true value creation.
41:59 Why token spend within organizations is going to continue to increase
43:54 Why agent evaluation to commoditize the model layer will be a massive business for enterprises?
51:13 Why we should have increased capital gains tax
01:01:31 How to compete with $20 million a year from Meta?
01:08:49 Will Mercor go public and when?
How AI is reshaping work and who gets to do it, according to Mercor's CEO
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The Best of 2025 (So Far) with Sarah Guo and Elad Gil
2025 has thus far been a year of great leaps and advances in AI technology. And Sarah and Elad have spoken with some of the most enterprising founders and scientific minds in the field of AI today. So we’re revisiting a few of our favorite conversations on No Priors so far in 2025 – Winston Weinberg (Harvey), Dr. Fei-Fei Li (World Labs), Brendan Foody (Mercor), Dan Hendrycks (Center for AI Safety), Noubar Afeyan (Flagship Pioneering), Brandon McKinzie and Eric Mitchell (OpenAI o3), Isa Fulford (OpenAI), Arvind Jain (Glen), and Dr. Shiv Rao (Abridge).
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Follow us on Twitter: @NoPriorsPod | @Saranormous | @EladGil
Chapters:
00:00 – Episode Introduction
0:21 – Winston Weinberg on Leaning into New Capabilities
02:01 – Dr. Fei-Fei Li on Spatial Intelligence
04:13 – Brendan Foody on AI Disruption in the Workforce
06:10 – Dan Hendrycks on the Geopolitics of Superintelligence
08:06 – Noubar Afeyan on Entrepreneurship
10:38 – Brandon McKinzie and Eric Mitchell on Reasoning Models
12:41 – Isa Fulford on Training Deep Research
13:49 – Arvind Jain on Innovating Enterprise Search
16:21 – Dr. Shiv Rao on AI’s Human Impact
18:58 – Conclusion
Why experts writing AI evals is creating the fastest-growing companies in history | Brendan Foody (CEO of Mercor)
Brendan Foody is the CEO and co-founder of Mercor, the fastest-growing company in history to go from $1M to $500M in revenue (in just 17 months!). At 22, he is also the youngest American unicorn founder ever. Mercor works with 6 of the Magnificent 7 and all top 5 AI labs to help them hire experts to create evaluations and training data that improve their models. In this conversation, Brendan explains why evals have become the critical bottleneck for AI progress, how he discovered this massive opportunity, and what the future of work might look like in an AI-driven economy.
What you’ll learn:
1. Why evals are becoming the primary bottleneck for AI progress and what this means for AI startups
2. How Mercor grew to $500M revenue in 17 months (fastest in history)
3. Brendan’s meeting with xAI that changed his company’s trajectory
4. Which skills and jobs will remain most valuable as AI continues to advance (hint: jobs with “elastic” demand)
5. Why Brendan believes AGI and superintelligence are not happening anytime soon
6. The three unique core values that drove Mercor’s success
7. How Harvard Lampoon writers are making Claude funnier
—
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—
Transcript: https://www.lennysnewsletter.com/p/experts-writing-ai-evals-brendan-foody
—
My biggest takeaways (for paid newsletter subscribers): https://www.lennysnewsletter.com/i/173303790/my-biggest-takeaways-from-this-conversation
—
Where to find Brendan Foody:
• X: https://x.com/BrendanFoody
• LinkedIn: https://www.linkedin.com/in/brendan-foody-2995ab10b/
—
Where to find Lenny:
• Newsletter: https://www.lennysnewsletter.com
• X: https://twitter.com/lennysan
• LinkedIn: https://www.linkedin.com/in/lennyrachitsky/
—
In this episode, we cover:
(00:00) Introduction to Brendan Foody and Mercor
(05:38) The “era of evals”
(09:26) Understanding the AI training landscape
(17:10) The future of work and AI
(25:54) The evolution of labor markets
(29:55) Understanding how AI models are trained
(38:58) Building Mercor
(53:27) Lessons from past ventures
(56:55) The future of AI and model improvement
(01:00:41) His personal use of AI and final thoughts
—
References: https://www.lennysnewsletter.com/p/experts-writing-ai-evals-brendan-foody
—
Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com.
Lenny may be an investor in the companies discussed.
To hear more, visit www.lennysnewsletter.com
20VC: Mercor: From $1M to $500M in 17 Months: The Fastest Growing Company in the World | How to Think About Margins and Revenue Sustainability in AI | Why Evaluation Benchmarks in AI are BS Today with Brendan Foody
Brendan Foody is the Co-Founder and CEO @ Mercor, the fastest growing company in history. The company solves talent allocation in the AI economy and they have scaled from $1M to $500M in revenue in just 17 months. With a rumoured new funding round pricing the company at a whopping $10BN, the company has the likes of Benchmark, Felicis, Emergence, and of course, 20VC, all on their cap table.
AGENDA:
04:34 Why My Mother Thought I Was Selling Drugs as a Kid
07:48 In The Time My Peers Graduated, I Created a $10BN Business; Is College Worth it?
10:27 Scale, Surge, Mercor, Turing: How Do Data Providers Differentiate
20:57 Scaling from $1M to $500M: We Quadrupled Since Scale was Acquired
33:43 Is There Too Much Cash in Private Markets?
34:55 Why Evaluation Benchmarks in AI are Total BS
35:44 Revenue Sustainability in AI Companies
36:48 Should Investors Give a S*** About Margins When Analysing AI Companies
40:46 The Future of AI Model Providers: Who Wins
45:58 You Cannot Create a $10BN Company without 9-9-6 Work Culture
48:56 We Literally Have Too Much Money, We Cannot Spend It…
52:36 Quick Fire Round: OpenAI vs Anthropic, Lessons from Peter Fenton and Jack Dorsey
TWiST 500 interviews with Cortical Labs, Turing, AND Mercor | E2159
Today’s show:
Alex is back with three more awesome interviews with founders on the bleeding edge of innovative tech.
Dr. Hon Weng Chong walks us through the basics of biological computing and Cortical Labs’ first-ever commercial computer running on living human cells.
Turing founder Jonathan Siddarth unpacks the secrets of LLM benchmarking, and explains why even our most advanced tests need to get much much harder right away.
Finally, Mercor founder Brendan Foody on how AI is about to reinvent the hiring process, and marrying the effectiveness of recruiters with the ease of online job boards.
It’s three — count ’em, three — can’t miss TWiST interviews guaranteed to make you smarter
Timestamps:
(0:00) OpenAI’s GPT-5: When is it coming out? Is it going to be TOO smart?
(08:06) Cortical Labs’ Hon Weng Chong on the electric connection between neuroscience and machine learning
(10:20) Northwest Registered Agent. Form your entire business identity in just 10 clicks and 10 minutes. Get more privacy, more options, and more done—visit https://www.northwestregisteredagent.com/twist today!
(11:27) Show Continues…
(15:17) The extreme difficulty of going from the lab to a shippable product
(20:00) .TECH: Say it without saying it. Head to www.get.tech/twist or your favorite registrar to get a clean, sharp .tech domain today.
(21:05) Show Continues…
(28:15) Why data is a factor of time
(29:52) AWS Activate - AWS Activate helps startups bring their ideas to life. Apply to AWS Activate today to learn more. Visit aws.amazon.com/startups/credits
(31:16) Show Continues…
(42:44) Turing CEO Jonathan Siddarth explains why it’s so important to keep benchmarking our LLMs
(47:24) What it means when a model “saturates” a test, and why benchmarks need to get HARDER
(50:22) What happens with the LLMs can answer all of our smartest questions?
(53:44) AI Agents train in gyms? Wait, really?
(01:01:33) Coding teaches models how to think, and more training mysteries don’t understand
(01:03:11) Brendan Foody from Mercor explains the “matching problem” that makes hiring such a pain
(01:07:02) How Mercor combines a job board’s distribution with the value of a recruitment agency
(01:10:49) Brendan recalls building his first AI interviewer in his college dorm
(01:20:16) Mercor has the opposite of a retention problem and crazy growth
Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com
Check out the TWIST500: https://www.twist500.com
Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp
Follow Lon:
X: https://x.com/lons
Follow Alex:
X: https://x.com/alex
LinkedIn: https://www.linkedin.com/in/alexwilhelm
Follow Jason:
X: https://twitter.com/Jason
LinkedIn: https://www.linkedin.com/in/jasoncalacanis
Thank you to our partners:
(10:20) Northwest Registered Agent. Form your entire business identity in just 10 clicks and 10 minutes. Get more privacy, more options, and more done—visit https://www.northwestregisteredagent.com/twist today!
(20:00) .TECH: Say it without saying it. Head to www.get.tech/twist or your favorite registrar to get a clean, sharp .tech domain today.
(29:52) AWS Activate - AWS Activate helps startups bring their ideas to life. Apply to AWS Activate today to learn more. Visit aws.amazon.com/startups/credits
Great TWIST interviews: Will Guidara, Eoghan McCabe, Steve Huffman, Brian Chesky, Bob Moesta, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland
Check out Jason’s suite of newsletters: https://substack.com/@calacanis
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From Job Displacement to AI Trainers, Brendan Foody on Work in the AI Age
On this episode of No Priors, Sarah and Elad sit down with Brendan Foody, CEO and cofounder of Mercor, to discuss the company’s rapid growth and their vision for the future of the labor market. They dive into how AI is reshaping the workforce in real, tangible ways and what skills are worth investing in today. Brendan shares insights on evaluating talent in an AI-driven world, including how models might identify outlier or 10x candidates and even assess “taste.” The conversation also touches on the evolving role of human data, the future of hiring in fast-scaling startups, and whether AI will act as an individual contributor or a data-centric manager.
Show Notes:
0:00 Introduction
0:16 Building Mercor
3:00 Identifying outlier talent with AI
9:07 How AI is reshaping the workforce: job displacement & evolution
11:18 What skills should we invest in now?
12:18 Verifiability
13:36 Evaluating models
16:07 What should kids learn today?
17:05 Evaluating taste in talent assessments
18:45 Future of data collection
26:07 Humans’ role in the AI economy
28:53 AI as a contributor vs. a manager
33:03 Mercor’s goals
34:50 Evolution of labor markets
36:00 Hiring advice
