.@AppliedInt Co-founder and CTO Peter Ludwig says "a billion machines will become autonomous or intelligent over the next ten years." "Cars, trucks, tractors, mining haulers, defense systems, warehouse robots, humanoids—the physical economy will be rebuilt around software that perceives, decides, and acts." "The prevailing assumption about how we get there goes something like this: models keep improving, world models mature, foundation models for robotics arrive, and autonomy falls out the other end. Intelligence is the whole game; scale the intelligence and the machines will follow." "The contrarian bet, then, isn't against intelligence. It's that the next order of magnitude in physical AI comes from making the engineering system as intelligent as the models it carries." Full piece on compounding systems and Applied Intuition's newest platform, Dana:

The past couple months we may be witnessing what the Applied AI layer will look like at scale. Despite some of the initial critique that this would just be a thin layer on the LLM, it’s turning out that actually driving agentic workflows in an enterprise is far more complex. And anywhere there’s complexity you generally gain a moat and value over time. Here are a few of the components that appear to make up the playbook based on the examples we’re collectively seeing in coding, legal, healthcare, customer support, financial services and other fields: * Build the features that bridge the gap between the intelligence and the workflow. Some workflows can be automated by simply going to a general purpose interface, but others need tuned interfaces and features tied to the work they’re augmenting or automating. They need features that are specific to capturing the kind of data that’s needed as context for the agent. And they need a variety of bespoke tools for the agent to use, and unique interfaces for the human-in-the-loop UX. Going far deeper than just presenting the output tokens is clearly critical, and the more depth there is here definitionally the more sustaining value. * Act as the model router balancing frontier intelligence with cheaper models. A natural advantage that any model neutral platform has is that it can naturally (in a business model-aligned way) leverage whatever level of intelligence is necessary for the workflows they’re automating to get done. There are plenty of scenarios where you need GPT-5.5 or Fable level capability, and also lots of workloads where a more efficient closed or open weights do the trick. Only the companies that have deep evals on specific tasks across all models, and the ability business model wise to leverage them, are in a great position. * Drive the actual implementation and change management via FDE or equivalent. A big reason the applied layer works at scale is that most enterprises need some degree of help and support with change management in implementing agents for their workflows. Data has to be cleaned up and moved to modern systems, processes have to be re-engineered and documented, workflows have to be evaled, SLAs have to get achieved, and so on. All of this is going to be unique for every type of process that gets implemented, which means the companies that have expertise in a given domain and come with all the relevant best practices will be in a strong position. * Implement domain specific GTM that creates expertise in that field. Beyond FDEs the companies that can build sales and GTM motions aligned to their domains also have a natural advantage. Most IT and line of business leaders have too many things to do in any given day; so if you’re not on their agenda, likely someone else is. Depending on the industry, there are entirely different sets of language you use, ways of working through security and compliance, regulatory controls you have to support, industry events that companies convene at, different system integrator and consulting partners you need to work with, and so on. The more generalized this gets the less you can speak the customers language, which is where the applied layer has a leg up. A final note. There remains a view that a lot of this is all mitigated by model intelligence alone, and the bitter lesson solves all of this in the limit. That’s possibly true, but enterprises need help changing *today*. And many aspects of how to bring intelligence to real world work don’t only depend on the axis of the pure capability of the model, so most of what you’re doing now to win ends up being important no matter how good the models get.

META PREPARES TO CUT 8,000 EMPLOYEES IN AGGRESSIVE PIVOT TO APPLIED AI Meta is reportedly slashing approximately 10% of its global workforce on May 20, impacting nearly 8,000 employees. This mass reduction coincides with the strategic reallocation of at least 1,000 elite engineers into a newly formed Applied AI Engineering unit.

A Cursor customer negotiated a proposed $1.5 million contract down to $250,000, raising questions about the company’s pricing power. Read more in today's Applied AI newsletter:

We’re hiring like crazy at @tenex_labs. Launched 15 months ago and on track to end the year at Series C size. Few key roles: 1) DevRel: If you work in DevRel and want to join a hypergrowth applied AI company transforming fortune 500s & incubating ai products, shoot me a DM. 2) Long form writer: you’d own our newsletter, longform site content, applied AI playbooks, research reports, etc. shoot me a DM if you think you’re a good fit.

Landed back in NYC after a stretch across Europe visiting TECH by @handelsblatt, @sxswlndn and @LDNTechWeek. Europe is building category-defining companies in applied AI. The talent is world-class, the ambition is real, and the best founders here are thinking globally from day one. The ones who win are the ones who go for the category, not the niche. We started @WeAreLegora in Stockholm three years ago with exactly that conviction. Three years in, with $100M ARR, 1,200+ firms across 50 markets, and a team expanding across four continents, that bet is paying off. Thanks to TECH, SXSW and London Tech Week for having me.

To lead well, companies need a partner that can bridge the gap between ambition and outcomes. BCG brings strategic clarity, rooted in over 60 years of deep domain knowledge, combined with applied AI. The result? Transformative impact at scale.

To lead well, companies need a partner that can bridge the gap between ambition and outcomes. BCG brings strategic clarity, rooted in over 60 years of deep domain knowledge, combined with applied AI. The result? Transformative impact at scale.

BREAKING: OVER 4,000 TEAMS AND SOLO BUILDERS ARE NOW ON THE WAITLIST FOR THE @primisprotocol BETA 🔥 "Builders are clearly demanding predictable compute they can scale around, with notable names from @xai, @AppliedInt, @rendernetwork, and more already spotted on the list."