Box CEO Levie says model prices falling, excited about open weight options

Box CEO Aaron Levie said enterprise customers are looking to "a model neutral layer" that will direct workflows to the cheapest models at the accuracy level needed.

Speaking on Box's second quarter earnings call, Levie riffed on where he sees agentic AI going. He was inevitably asked about AI costs.

"Customers will increasingly want those types of workflows to happen inside of platforms that are model neutral because the more tokens your use case requires, the more, obviously, over time, you're going to be price sensitive because you want to make sure that you're optimizing that cost structure for the use case," said Levie.

These neutral layers, or agentic harnesses, will be key to bringing down AI costs. Levie said in many cases, open weight models will be used. "There are (open weight) models on the horizon that we're quite excited about, that we'll be opening up. We assume in the second half based on some of the visibility we have from partners," said Levie. "In other cases, it can be just the sheer competition that's happening between the labs. You've seen things like OpenAI bringing down their prices or Gemini bring down its prices. That actually also flows into our product as more either margin or relief or more consumption from customers."

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Levie also noted that Anthropic's Fable model has had slower adoption due to its zero data retention policies. "Most of the leading labs coalesce around the idea of zero data retention, which basically in simplest terms means that when I kind of am interacting with an AI model and I have information in the context window, that data doesn't sort of get stored and sit around for a week or 30 days in the servers of those AI labs, it's sort of just a kind of a femoral pass-through," said Levie.

He added:

"The challenge with something like Fable was it launched without zero data retention, which obviously means that there can be less adoption, you have to have kind of a separate exception handling that customers have to go through. And we've made it very clear in our platform that the sort of in production GA generally available models we'll have a set of criteria that are met around zero data retention, certain compliance requirements, ways that the infrastructure is hosted, being able to have certain regions that it all operates in.

My guess realistically is Anthropic will evolve its stance on this because they'll see it in the revenue. And they'll have to change course."

Box reported revenue growth of 9% in the second quarter and largely met expectations. The company reported earnings of 9 cents a share on revenue of $321.1 million. Non-GAAP earnings were 40 cents a share. Wall Street expected Box to report non-GAAP earnings of 40 cents a share on revenue of $319.1 million.

For the third quarter, Box said revenue will be about $329 million, up 9% from a year ago with non-GAAP earnings of 39 cents a share. For fiscal 2027, Box said revenue will be up 10% from a year ago to $1.29 billion. Non-GAAP earnings will be about $1.54 a share for the year. Box reports a big chunk of its international revenue in Japanese Yen, which has been volatile vs the US dollar.