Sarah Guo and Elad Gil: The Future of AI Investing
Feb 1, 2024
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Former Greylock General Partner and Conviction founder Sarah Guo and long-time entrepreneur and startup investor Elad Gil discuss the surprise of ChatGPT3, the future of AI consumer products, and the potential UI evolution AI platforms could bring in this episode. They also explore the potential benefits and drawbacks of chat interfaces, the connection between Web Three and AI, and the legal implications and complexities of AI-generated content.
The surprising consumer reaction to ChatGPT3 highlights the rapid acceleration of AI capabilities in consumer products.
Opportunities for AI companies extend beyond large models, with potential breakthroughs in areas like science, medicine, and robotics.
Chat interfaces show promise as a natural and intuitive way to interact with AI, but multimodal interfaces that combine text, voice, and other modalities are also necessary for enhanced user experiences.
Deep dives
The Growing Importance of AI in Venture Capital
The podcast episode features a discussion with Sarah Guo and Elad Gil, two investors who focus on AI companies. They talk about the current state of AI strategy, products, and investment opportunities. They highlight the unexpected consumer reaction to chat GPT and the rapid acceleration of AI capabilities. The discussion also touches on the future of AI companies, with Sarah emphasizing the potential for application-level teams and Elad mentioning the different waves of human capital and the growth of B2B and B2C applications. They discuss the possibilities of chat interfaces and the potential for multimodal interfaces in future applications. Hardware products in combination with AI are also mentioned as a way to enhance capabilities and create new experiences.
The Evolution of AI Investment Opportunities
Sarah and Elad discuss the evolution of opportunities for AI companies. They mention that while large models have received significant funding recently, there are still opportunities for new breakthroughs and specialized models in areas like science, medicine, and robotics. They foresee subsequent waves of human capital and the rise of B2B and B2C applications. Sarah highlights the potential for different workflow-oriented business user applications, while Elad sees an app wave in both the B2B and consumer markets. They emphasize the need to communicate the value and capabilities of these models to users, as well as the continued importance of human involvement in AI interactions.
The Role of Interfaces in AI Applications
The podcast explores the role of interfaces in the next wave of AI applications. Sarah and Elad discuss the potential of chat interfaces as a natural and intuitive way to interact with AI. They mention existing examples, such as AI girlfriend apps, as proof that chat can serve as a compelling interface for applications. However, they also foresee the need for multimodal interfaces that combine text, voice, and other modalities for a more enhanced user experience. They discuss the potential for AI agents that understand user intent and can perform tasks on their behalf. The importance of communicating AI capabilities and focusing on specific use cases is also emphasized.
Automation of data analytics jobs and resistance from analysts
There is a company called SEEK that is automating data analytics jobs by developing a natural language interface for querying databases. While it has gained traction among smaller and larger customers, there is resistance to this automation from some analysts. These analysts may not find the 70-80% automation capability compelling, but it may be appealing to their bosses. The adoption of automation in organizations may depend on where it is being sold and the incentives within those organizations.
The return of capital-efficient businesses and the role of AI founders
In recent years, many companies raised significant amounts of funding in the pursuit of high valuations, overlooking the importance of capital efficiency. However, there has been a shift with AI founders who are driving capital efficiency within their companies. The history of successful tech companies shows that capital-efficient businesses often perform well. While AI can play a role in accelerating and enhancing capabilities, claims of major reductions in engineering teams, like one engineer handling the work of ten, may not be realistic. Overall, the focus should be on building sustainable and efficient businesses.
In this episode, long-time entrepreneur and startup investor Elad Gil and former Greylock General Partner and Conviction founder Sarah Guo join host and Lightspeed Partner Michael Mignano to take a look at the broadening world of AI investing. The three discuss the surprise of ChatGPT3, the future of AI consumer products, and the potential UI evolution AI platforms could bring.
Episode Chapters
(00:00) Sarah Guo and Elad Gil, investors extraordinaire
(03:45) 2023 was the year of AI - did they see it coming?
(11:12) The go-forward opportunity for foundational models
(16:31) What does the next app wave look like?
(19:01) Who’s winning AI: Consumer or Enterprise??
(23:35) Will SMBs leverage AI or will SMBs be the new BigCo’s as a result of AI??
(31:30) Vertically integrated models
(39:54) Chat as an interface: the future or the past?
(49:19) Hardware x AI
(55:45) Will Web3 be the way to verify authenticity?
The content here does not constitute tax, legal, business or investment advice or an offer to provide such advice, should not be construed as advocating the purchase or sale of any security or investment or a recommendation of any company, and is not an offer, or solicitation of an offer, for the purchase or sale of any security or investment product. For more details please see lsvp.com/legal.
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