20VC: Mercor CPO on Revenue Concentration from Frontier Labs | Why Large Enterprise is Scared to Partner with Frontier Labs | Why Small Specialised Models is the Future with Osvald Nitski

The rapid evolution of AI models creates a growing, insatiable demand for high-quality, specialized human data, shifting the primary bottleneck for enterprise AI from model architecture to data evaluation and training. While open-source models raise the performance floor, frontier models require continuous, nuanced data to solve complex, long-horizon tasks that remain beyond current capabilities. Organizations are increasingly prioritizing "environments"—simulations that mirror real-world software workflows—to train agents effectively. As AI-driven engineering velocity increases, the role of product management is evolving toward higher-level business judgment and system design rather than tool-based execution. Despite skepticism regarding enterprise ROI, the most successful companies are those that treat AI spend as a growth engine, focusing on high-agency talent and rigorous experimentation to navigate the rapidly shifting landscape of AI deployment.