The Great Sobriety for Venture Investing, Where To Start with AI, & Undeniable Data

• Increasing perversion of certain business models that are liable to be gamed or constrained by AI : We’re shifting from a world where data analysis required long cycles (analysts need lots of time to run queries, analyze, and then present findings in a way that people understand) to a new world of real-time optimization and insights (AI will mine

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Many of the largest scale uses of AI to date have been at consumer-centric companies that have large data sets to train on (Google, Facebook, Uber, etc). Perhaps incumbents won due to a data advantage that is now going away as companies use the broader internet as an initial training set + are switching to models that work more robustly against sma... See more

Workflow+model startups will win by combining a fine-tuned model with deep customer insight to build an AI-native workflow. These startups will be particularly well-positioned to win in one of the following 3 scenarios:

1. Incumbent saas players do not have legacy workflow dominance in that vertical


2. An AI-native workflow solves the most critical creativ

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While many of the prior innovations in AI were striking and exciting (AlexNet, CNNs, RNNs, GANs etc) this time does feel different for a few reasons. There is reason to believe while incumbents should capture a good amount of the value in this wave, startups will take a bigger share of AI generated value this time around.

Increasing perversion of certain business models that are liable to be gamed or constrained by AI: We’re shifting from a world where data analysis required long cycles (analysts need lots of time to run queries, analyze, and then present findings in a way that people understand) to a new world of real-time optimization and insights (AI will mine th... See more

In each technology wave the value, revenue, market cap, profits and great people captured by startups versus incumbents differs. In some waves it all goes to startups, while in others it goes to incumbents or is split between them. Unexpectedly, the prior wave of value from AI roughly all went to incumbents over startups, despite a lot of startup a... See more

There is obviously leverage in AI, but it's almost certainly going to go to the big platforms. This is not a PC or internet-level disruption. This is an easy bolt on for the cloud providers, or for the companies who already have attention or data. There are going to be exceptions. Someone is going to build a $10 billion company out of AI. There wil... See more

- The generative AI revolution is swiftly giving rise to a myriad of startups, with an increasing need to categorize them by their function in the AI landscape, including foundational model providers, infrastructure enablers, and application developers.

- Generative AI is transforming industries across the globe, not just in Silicon Valley, with imp... See more