Everyday AI Podcast – An AI and ChatGPT Podcast

EP 136: Why so many AI startups will die

Nov 2, 2023

The conversation centers on the harsh reality facing many AI startups, with a looming threat of failure due to oversaturation and lack of uniqueness. They explore the explosive growth in VC funding, but caution that merely copying existing technologies won't lead to success. There's a strong emphasis on innovation and building actual products that solve real problems. Additionally, they highlight the disruptive potential of tools like ChatGPT and Microsoft 365 Copilot in reshaping the business landscape.

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INSIGHT

AI Startup Failures

Many AI startups will fail due to lack of innovation and following trends.
They struggle to compete with tech giants by merely copying ChatGPT or Midjourney.

INSIGHT

Inflated Valuations

Generative AI startups' median pre-money valuation has risen tenfold since 2020, reaching $90 million.
This explosive growth, fueled by OpenAI's API and ChatGPT, indicates market oversaturation.

ADVICE

Building Sustainable Startups

Build original products solving real-world problems instead of relying on others' tech.
Focus on creating sustainable solutions, not just adding features to existing models.

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So many AI startups are going to run out of money, fail, and ultimately die. We know. That's a harsh take but it's the unfortunate truth. So what is the cause of all these AI startups dying? That's what we're discussing today along with the future of startups and how they're impacted by AI.

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Timestamps:
[00:02:00] The rise of AI startups
[00:08:01] Explosive growth in VC funding for AI
[00:11:42] AI startup explosion fueled by money influx
[00:13:51] Startups using someone else's technology will fail
[00:16:07] Build actual products, solve problems, forget money
[00:21:50] Why startups fail
[00:24:52] ChatGPT's new mode, All Tools
[00:27:10] Why ChatGPT will take over
[00:32:07] Microsoft 365 Copilot will be disruptive
[00:38:02] Invest in companies, not just features

Topics Covered in This Episode:
1. Factors driving the growth of AI startups
2. Overview of the impact AI has on the business landscape
3. Challenges and reasons for AI startup failures
4. Cautionary notes for startups and investors

Keywords:
AI startups, generative AI, innovation, startups, failing startups, pre-money valuation, OpenAI, ChatGPT, AI tools, VC industry, private equity, oversaturation, high valuations, disjointed nature, multiple AI tools, Copy AI, Cloud, Mid Journey, Runway, Pica, Canva, Microsoft 365 Copilot, commercial availability, raising awareness, unique products, dependency on OpenAI and Google, Everyday AI newsletter, generative AI with plugins, business landscape, influx of AI startups, funding, degenerative AI market potential.

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