Anecdotally, we have seen a surprisingly consistent pattern in the financial data of AI companies, with gross margins often in the 50-60% range – well below the 60-80%+ benchmark for comparable SaaS businesses. Early-stage private capital can hide these inefficiencies in the short term, especially as some investors push for growth over... See more

But doing nothing has a number of issues. First, it ignores the very real fact that we do not need any further advances in AI technology to see years of future disruption. Right now, AI systems are not well-integrated into businesses and organizations, something that will continue to improve even if LLM technology stops developing

Generative AI’s first

year out the gate—“Act 1”—came from the

technology-out

. We discovered a new “hammer”—foundation models—and unleashed a wave of novelty apps that were lightweight demonstrations of cool new technology.

We now believe

the market is entering “Act 2”—which will be from the

customer-back

. Act 2 will solve human problems end-to-end.... See more