Gerstner coined ERR (experimental run rate revenues) to replace ARR for AI company revenues.
“one of the things we call them ERR, experimental run rate revenues, And so when I look at these, you know, one of the things that in inflection and these other models”
Gerstner says he banned the term ARR at Altimeter when discussing AI revenues.
“But when we look at what's going on in AI, I've banned the use of the term ARR within altimeter when we talk about AI revenues,”
“And and I playing around with credit card data, I think OpenAI is about 2,000,000,000, Anthropix about a 100,000,000, and Perplexity is at like 25,000,000. Yeah. Just I'm guessing”
Gerstner notes entire software industry earns $400B revenue, calling AI revenue requirement a physics problem.
“This and just to put this in context, the entirety of the software industry earns about $400,000,000,000 of revenue. This seems like a physics problem at this point.”
Gerstner predicts AI companies ending the year over $100B could triple to quintuple revenue next year.
“If these guys end the year over 100,000,000,000, I think that they're on a revenue trajectory that they could three to five x again next year.”
Gerstner says $200B of incremental revenue is incomprehensible in Silicon Valley history.
“We're talking from 100,000,000,000 to 300,000,000,000. 200,000,000,000 of incremental revenue is incomprehensible in the history of Silicon Valley.”