🤖 The Models Die First

Good morning to everyone who saw the price chart and stopped there.

SpaceXAI released Grok 4.6 last Wednesday. It matches OpenAI's best model on quality at a fifth of the price.

Your timeline called it the moat. We think they read the wrong number.

Today, the number on that chart with the shortest life on it.

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Grok 4.6 landed Wednesday, five weeks after Grok 4.5.

Start with quality.

On the Artificial Analysis Intelligence Index, a scorecard averaging dozens of tests, Grok 4.6 scores 61. GPT-5.6 Sol also scores 61. Fable 5 Max scores 62.

So the quality is a tie.

The bill isn't.

AI companies bill by the token, roughly a chunk of a word.

Grok charges $2 per million in, $6 out.

ChatGTP charges $5/$30. Claude charges $10/$50.

Same answer, 5x cheaper than ChatGPT. $100 of Grok output would run you $833 on Claude’s Fable.

One caveat before the victory laps.

SpaceXAI's chart leaves out a fourth rival: Claude Opus 5.

On GDPval-AA (a test of real professional work) that chart shows Grok winning at 1,753.

Opus 5 scores 1,861.

So Grok 4.6 is the third-best model in the world, and the cheapest near the top.

But the line everyone scrolled past wasn't on the chart. Elon says Grok 4.7 ships in three to four weeks.

Something big is coming to Second Order! 🤖

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Thanks for helping us build it right. Now, back to it.

The chips aren't what wears out fastest anymore.

The models are.

Look at the calendar instead of the chart.

35 days, with 4.7 three weeks out.

Now look at what SpaceXAI didn't do. It didn't cut the price. Grok 4.6 costs exactly what 4.5 cost.

Which brings us back to Monday.

We wrote about Michael Burry hunting depreciation, the rule that spreads a purchase across the years you expect to use it.

His bet: AI chips get booked over 5 years but stop being useful in 2 or 3.

The chips are the slow-moving asset.

The model trained on them is old news in 5 weeks, while the cluster that built it sits on the books for 5 to 6 years.

So what does this mean for your portfolio?

The companies built for that never needed the model to earn a profit on its own.

SpaceX sells rockets, Starlink and computing power. Grok makes all three worth more.

$GOOG ( ▲ 0.12% ) and $META ( ▲ 0.43% ) sell ads.

The exposed ones sell the model itself. Two are still private and want to go public (Anthropic and OpenAI).

Everyone priced the model. The model is the thing with the shortest life on it.

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