I am sure people here see it better than I do, so what new class of problems is this genAI going to solve?
I am sure people here see it better than I do, so what new class of problems is this genAI going to solve?
They are at best nice features or capabilities to have in wider enterprise application suite for say HR or Accountancy but on their own its just a lot of smart people working extremely hard to sell one tiny solution that is small cogwheel for a much larger problem.
My gut is telling me that very soon, if not now, there will be an opportunity for savvy VCs to sweep up some of these cogwheels and package them together into a real business and it's something I am exploring with a few other angels. Curious what others think on this. Feel free to DM me (details on profile).
Now that ChatGPT desktop can read files in my code editor and apply changes I've pretty much stopped using dev specific AI tools. Same with spreadsheet problems - where uploading data to ChatGPT and hoping for the best actually works pretty well now.
I was involved very early with automated speech recognition for transcribing meetings, but then both UberConference and Google Meet just integrated it into their existing offerings, thereby massively reducing the market size for standalone solutions. And given how heavily subsidized AI API calls are at the moment, just relying on them is a huge risk for your business model, because you never know when your suppliers' prices will 10x to represent the true cost of providing those AI services.
In my opinion, the sales of many of these new AI tools are mostly driven by the existing audience of the creator. In many cases, you could just ask an LLM to quickly build you your own competing solution, which you can then use for free. E.g. all those SEO content and LinkedIn blog post bots. Vibe-coded AI "businesses" are the software equivalent of branded white t-shirts.
After all, what is the business of such startups of the "AI age"? It's using the AI models on the backend, where users can't reach, to sprinkle some magic onto features. But as a user, I don't want your product to use AI as a tool, I want your product to be a tool the AI uses. The former keeps power away from users, the latter gives it back to them.
At work, I was tasked with building some magical agentic stuff, working on it for a while, I realized that, HN shouts, oAI/xAI/Google/Amazon/Anthropic have no moats, there are oss models available. The actual fact is, the moat is the access to scale of resources(GPUs, power infra, network), which is very difficult to build for random joe's startup.
You must always rent a model access from one of these players(even OpenRouter delegates), and that is the exact moat.
GenAI solves problems of having more generalized solutions, so instead of a super customized secret sauce solutions for your product as competitive edge, you now build magic prompts for GenAI to take the same input and hopefully with enough GenAI ingesting the same data and coming to consensus, you get a reasonably useful output that previously your custom solution was capable of. Since you no longer have a custom solution, you now pay off the GenAI operators(the real moat of GenAI for all operators hosting it). In the process,you also sacrifice your competitive edge of that super secret IP and relying heavily on GenAI prompting correctly and numerous verification in each step with enough automation, which of course again costs money.
GenAI is the new hammer of visionary leadership and executives (a hefty amount of money has been burned to campaign and PR to convince these people) to use it everywhere, so the operators can ensure that they make some profit from the amount of money they sank on it. If you super impose the "AI" of current year to "Apps" in 201x era, where everything must have an "app", you'll suddenly realize that we've seen the same before and of course most apps need cloud... and as clouds have costs, apps became more subscription model instead of previous 200x era buy once, use forever.
I suspect that model quality/vibes and integrations will play a role as well though.
How does this preclude the AI "age"? And why is the metric "companies make money off of it"?
I view it more like open source/Linux. When Linux was new, it was immensely useful , but not a means for companies to make money (except for a tiny few).
Or more precisely, far more people used Linux for their own personal benefit than companies making money off of it.
And so it is with generative AI. For me, personally, it's very useful.[1] So assuming the major companies (OpenAI, Anthropic, etc) don't go bankrupt and/or kill it off, gen AI is here to stay, and will continue to disrupt. That startups can't make much money off of it is somewhat irrelevant.
[1] It has revolutionized speech recognition for me. I have several automations running that were coded by Claude. Things that had been in my mind for years but I didn't have time to write them. MCP will add more value to my life soon. Etc.
1. It solves a problem. Doesn't have to be a completely unsolved problem, can just be a new solution. Or even just new packaging on an old solution. But it needs to solve some kind of problem.
2. It's trustworthy. Some people get a tool to suite their own process. But the majority, from anecdotal evidence, will adopt the tool's process. There's this idea that "these guys know how to do invoicing so I don't have to think about invoicing if I use their invoicing tool".
3. It's known. A bit philosophical, but if something exists that nobody _knows_ solves a problem they might not even know they have, how much of a useful tool is it, really?
DropBox is an interesting example. It wasn't exactly a major scientific breakthrough, and a lot of people asked "why don't people just use FTP?". If you focus on (1), DropBox looked close to pointless. But what they did is nail (2) and (3).
Now, if you subscribe to the hype, you might argue (1) and (2) will soon be covered. AI will magically solve your problem and be a universal domain expert telling you what to do, so you don't have to think about it. You might also argue that it will magically solve (3), with stuff like Gemini Live kinda watching you all day and constantly going "let me tell you how to do that" or "let me do that for you".
Seems unlikely to me. Not impossible, most things I can think of are theoretically possible. Just unlikely. And if you think even just _one_ of those three aspects can't be fully automated in the near future, there's still plenty of opportunity left to differentiate in that area.
I think generative AI does unlock a new generation of startups, because it's genuinely new technologies that we can find at least some valuable use cases for. And an army of startups tends to be better at quickly exploring a new solution space than a few big incumbents. So in that sense, it is similar to smartphones, which also brought a new solution space, and with it, startups.
It's trustworthy.
In what way is AI trustworthy? It's ruining the parts of the internet I use and care about. I can't visit Digikey's site in an incognito tab without having to sit through a ~5 second captcha these days. Mouser is less aggressive, but it's still problematic. Drew's spent how much time combating AI bots instead of improving Sourcehut?In fact I'd be hard pressed to think of a site that isn't getting boned by AI.
I've seen a depressing amount of people treat LLMs like some sort of oracle. So I can picture a significant number of consumers just trusting ChatGPT with their taxes or whatever, based on the assumption that it know any domain at least as good as human experts.
I'm not saying _I_ find any LLM trustworthy. But if enough people do, it becomes difficult to differentiate there.
In terms of what problems it solves, I would imagine that will be up to the developers/companies to come up with the Uber/Airbnb/Tiktok, that the iPhone enabled, that AI enables. Same as any platform.
"I am getting extremely skeptical of Photoshop. What class of problems is this software going to solve?"
"I am getting extremely skeptical of the internet. What class of problems is this network going to solve?"
We're still in the post Netscape, pre-dotcom-crash bubble.
Real applications are coming.
https://www.theverge.com/news/646458/openai-gpt-4-1-ai-model