Sequoia's @deanmeyerrr: "If distillation is real, the question is, how do we address the asymmetry?" "Western companies aren't going to set up 35,000 proxy accounts to steal from Anthropic." "There *is* a structural asymmetry, and it's something we have to think about." "The gap between closed and open source has closed a lot." "And the key conversation online, over the past week, was distillation the reason for this? Or is there some other, mysterious reason?" "The truth is, from the conversations we've had, is that it's somewhere in the middle." "Whether it's 20% or 40%, it doesn't really matter as much. But it's meaningful that we know it's happening." "We know from the labs that there's 10s of millions of queries through these large-scale proxy distillation accounts." "We also know, if you speak to anyone who's leading in synthetic data gen on pre- or post-training at the labs, they will tell you that even if you do hardcore KYC, and then just get access to the output (let's assume you just get the output from the prompt), it is still extremely valuable." "That is 100% true. We know distillation is real."