Charts of the Week: Open model of choice?

A flip in open model dominance; HVAC gets paid; Broadcast TV makes a comeback (using one neat trick); AI Efficiency (or is it); An under-the-radar leading signal for M&A

Open season on open source

• Steve Hsu coined the “skull graph moment” as the point at which an upstart overtakes an incumbent with a rate-and-pace-of-change that not only closes a previously “insurmountable” gap, but begins to create a new one, in favor of the challenger.

• US-made open models just recently had something of a skull-graph moment with respect to Chinese models. For ~1.5 years, US models enjoyed a pretty fat lead as the global “open model of choice,” at least measured by downloads, but in March 2025 that began to change: Chinese model adoption began to accelerate rapidly.

• In a span of less than 6 months, cumulative downloads of Chinese open models had not only overtaken US models, but began to open a widening lead. A good chunk of that Chinese overtake is driven by Qwen’s popularity as an open-source model (at the expense of Llama).

• For example, Brian Chesky just told the world “we’re relying a lot on Alibaba’s Qwen. It’s very good. It’s also fast and cheap . . . we use OpenAI’s latest models, but we typically don’t use them that much in production because there are faster and cheaper models.”

To be fair, US model adoption has reaccelerated recently, as well, but the point stands: the race for model dominance is definitely on (and just getting started). The other lesson here is that, given how quickly the ecosystem is evolving, the competitive landscape today will (probably) look nothing like the landscape one year from now (let alone five years from now). In all events, the time to build is now, same as it ever was, only more so.

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Help Wanted: HVAC

• While everyone knows the skilled trades are in short-supply, no skilled-trade is more bottlenecked than HVAC.

• The wage premium for HVAC workers is ~25% since 2020, which is more than double the median gross salary increase nationwide (and more than double the premium for the other skilled trades, like electricians, plumbers and carpenters).

• Public markets have noticed, as well. The share price for Comfort Systems USA FIX 0.00%↑ (which supplies skilled labor to big industrial projects) looks more like a staircase than a price chart with every earnings release.

Secular aging, plus the AI Capex Supercycle, have made it an increasingly good time to be skilled in the world of atoms. The college wage premium may have gone flat, but if you know a thing or two about industrial cooling, you can write your own check.

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Sportsball to rule them all

• After years of relentless marketshare capture by streaming at TV’s expense, streaming actually took a step back, recently.

• Streaming peaked at nearly 50% of viewing time in July 2025, but has regressed slightly to ~45%, as cable, but especially broadcast, mounted something of a comeback.

• Broadcast’s streaming share jumped just under 20% from August to September, which is not only the largest MoM increase in Nielsen’s series, but represents the first time that Broadcast surpassed Cable.

• The culprit? Live sports: NFL and NCAA football drove a 3x shift in sports viewership (which comprises a full third of Broadcast’s screentime).

There’s a reason that Prime, Netflix and others have set their sights on live sports (and why investment in alternative sports leagues, continues to proliferate): the people love sportsball. Sports is the thing more than any other thing that dictates platform preferences—the proverbial ‘king of the hill’ in the attention economy.

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AI payback is hard to measure (or is it)?

• Coatue recently made the point that AI payback can be a bit hard to measure because it can manifest in multiple ways, both as a lift to top-line, but also a shrink to bottom-line (and sometimes at the same time).

• Coatue gave two examples of AI “efficiency gains” outside of tech: a shipping company increasing shipments per employee by 1.5x (translating to a ~30% reduction in headcount), and a mortgage company reporting a 6x increase in saved underwriting time (for ~$40M in annual run-rate savings).

• That’s true, so far as it goes, but it’s very possible something else is afoot, having nothing to do with AI: a cyclical increase in utilization rates (and rate-driven headcount reductions).

• Taking Rocket as an example, not only had mortgage origination volume slowed precipitously in Q4 ‘22, Rocket Mortgage (and pretty much everyone else) made substantial cuts to headcount—~$500M decrease from ‘22-’23—in anticipation of a rate-driven economic slowdown (that never really came). The net-result is a mechanical increase in “productivity” that probably isn’t AI-related, in the main.

AI gains are real, and will, in fact, manifest in hard to measure ways, so kudos to Coatue for surfacing that point. Plus, just because Rocket wasn’t getting AI efficient in 2023 (when the real run-rate savings materialized) doesn’t mean that they’re not getting AI efficient now. That said, remember when Klarna told everyone that AI made the company wildly more productive (shortly after rates went up and Klarna let a lot of people go)? The point is that management teams are good at telling investors what they want to hear, and if everyone wants to hear “AI productivity gains,” then that’s what management will tell.

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Hush-hush is the leading signal

• While deal activity (by count) continues to slide off its ZIRP peak, there’s some evidence that an M&A boom is right around the corner.

• According to the law firm, Kirkland & Ellis, the number of NDAs processed has spiked recently, on both the sell-side and buy-side (and why process a bunch of NDAs, if you’re not ready to deal?)

If we’re being totally honest, we’re not going to vouch for the veracity of the data or the strength of the signal, but it sort of passes the eye-test (as previous big jumps in ‘21, ‘23, and ‘24 were accompanied by a flurry of deal activity). Mostly, it’s just a neat-idea, and hopefully a bullish signal.

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