The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

20VC: OpenAI's Sam Altman, Mistral's Arthur Mensch and more discuss: Will Foundation Models Be Commoditised | Which Startups Are Threatened vs Enabled by OpenAI | Is the Value in the Infrastructure or Application Layer?

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May 24, 2024

Join Sam Altman, the visionary CEO of OpenAI, and Arthur Mensch, co-founder of Mistral AI, as they dive into the future of foundation models in AI. They discuss the rapid commoditization of AI technologies and what it means for emerging startups. The conversation touches on how established players could become both competitors and collaborators, emphasizing the need for innovation in a crowded market. Expect insights on user ownership, personalized models, and how AI could evolve into a utility service, forever changing the landscape of technology.

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INSIGHT

Commoditization of Foundation Models

Foundation models will likely commoditize, similar to the early car industry.
Long-term differentiation will come from personalization and integration, not the base model.

INSIGHT

Model Efficiency and Price

Improving model efficiency makes specialized applications easier to create.
Competitive pressure and model advancements are driving down the price per unit of intelligence.

ADVICE

Investing in Foundation Models

Be cautious about investing in foundation models due to rapid commoditization.
Consider infrastructure and application layer investments instead.

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Sam Altman is the CEO @ OpenAI, the company on a mission is to ensure that artificial general intelligence benefits all of humanity. OpenAI is one of the fastest-scaling companies in history with a valuation of $90BN and $2BN+ in revenue.

Brad Lightcap is the COO @ OpenAI and the man responsible for the incredible scaling of sales, GTM, partnerships and business to today being over $2BN in revenue.

Arthur Mensch is the Co-Founder and CEO of Mistral AI. Since its inception in May 2023, Mistral has raised over $520M in funding from investors like Andreeseen Horowitz, General Catalyst, Lightspeed Venture Partners, and Microsoft with a current valuation of $2 billion.

Des Traynor is a Co-Founder of Intercom, and has built and led many teams within the company, including Product, Marketing, and Customer Support. Today Des leads all of Intercom’s R&D efforts, and parts of Intercom’s marketing.

Tom Hulme is a Managing Partner of GV (Google Ventures), and leads the European team. Today, GV has over $10BN in AUM and Tom has led investments in Lemonade.com (IPO), Snyk, Secret Escapes, Blockchain.com, GoCardless, and Currency Cloud (exited to Visa).

Tomasz Tunguz is the Founder and General Partner @ Theory Ventures, just announced last week, Theory is a $230M fund that invests $1-25m in early-stage companies that leverage technology discontinuities into go-to-market advantages.

Sarah Tavel is a General Partner @ Benchmark, one of the most successful and renowned venture firms in the world. At Benchmark, Sarah has led rounds in Chainalysis, Hipcamp, Medely, Rekki, Glide, Cambly and more.

In Today's Episode We Discuss:

Will foundation models be commoditised?
What is the end state for the foundation model landscape in 10 years?
How will large cloud provider incumbents approach M&A with smaller foundation model providers?
When will we see marginal revenue exceed marginal cost in the foundation model business model?
Where is the value: the application layer or the infrastructure layer?
How can startups know whether they will be threatened by OpenAI?
What are good tests/questions to know if you are in the path of one of the large foundation models?
How does the business model of SaaS fundamentally change in a world of AI?
Will we see the end of per-seat pricing in a new world of AI?
What is the right way to approach pricing in a world of AI? Consumption? Tokens?