What are the broad trends of the opportunities for startups looking to galvanize AI right now?
Well, I think what we're seeing is that AI is permeating every aspect of our lives already, and this is really just day zero.
And if you look across these companies and at their growth trajectories, what you're seeing is that we're seeing incredibly almost unprecedented levels of growth as people harness the trend and the demand in the market for AI.
You know, we're seeing revenues ramp more quickly than ever before.
Companies like Model that are helping companies put A.I. into production and build apps that run on top of it are able to grow incredibly quickly. And what's most exciting to me is this is just the beginning. I think that's exactly it.
For many, it's been where is the value going to lie for now?
Picks and shovels, infrastructure, the actual chips, the hardware that you need to build these large language models.

And then you're saying it's companies
that help you actually apply to build applications that are building a
revenue. Where else are we starting to see
startups build the next layer of opportunity?
Oh, across the board, there's a company, for example, called Normed on AI that's
helping turn hundreds of thousands of regulatory rules into automated AI,
automated AI compliance agents that can help financial institutions better
comply with the regulations in place. And the work is so insurmountable that
you couldn't do it before without AI. So, yes, of course, it starts with the
picks and shovels, but we're already seeing A.I.
start to move up the application stack into categories like compliance,
insurance, financial services, other already too many start-ups.
I mean, we had come along over hugging face, saying, Look, I'm getting calls
ten more than a week of companies needing to sell themselves to me because
they cannot keep going.

They can't keep growing.
They don't have the money. That's absolutely the case.
Whenever you have such an incredible platform shift like this, there are a
lot of venture dollars that go into it, a lot of optimism.
There's a Cambrian explosion of companies, and obviously that's not
sustainable. But this is also part of a healthy
ecosystem, right? We have all these brilliant founders
that are coming out of existing, you know, incumbent companies to try to
build something new, and they won't all be successful.
But we learn a little bit every time. And some of these companies will, of
course, get acquired into larger institutions, and then people will bring
their own learnings and innovations into those.
And that's the cycle of startups that we've seen in every other platform
shipped before. So I think this is a good thing, even if
temporarily a little painful for some. Erica What's interesting is we were just
talking with Warby, and they've got to

deal with Uber, Uber, Airbnb.
These companies that came into existence disrupted and stayed independent in the
previous wave of move to Mobile. Now we see these weird deals going on.
Acquires Inflexion going into Microsoft, sort of relationships built between open
AI and every other company. What sorts of companies will end up
existing or will they be bought out or M&A and deals done with incumbents?
Sure. I mean, I don't have a crystal ball, and
I think it's really important to call out that, you know, we're still climbing
the hype cycle. So there is a long time to come where
we'll see a lot of evolution, just like we saw in the shift to mobile.
You mentioned all these companies and they all came several years after mobile
phones and the smartphone really came out.
So we're going to see the same thing, I think, with AI.
We're going to, of course, see a ton of

M&A.
Of course, all eyes are also on regulators to see what's allowed to
happen. And I think you take the Case of
Inflexion and some of these other, I'll call them, creative deal structures that
probably had to be put in place because of fear of regulators.
But the incumbents know that they need to harness this technology.
They need to forge relationships with these up-and-comers in order to remain
relevant over time. So, yes, we're going to see some
generational companies that are getting formed right now, just like we have in
previous platform shifts. We're also going to see a lot of very
interesting and exciting alliances between startups and incumbents come.
We're going to see a lot of M&A to come as well.
And I think, you know, some of the greatest companies of the next 20 years
haven't even been started getting built yet.

Redpoint's Brescia: AI Moving Up the Application Stack

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Redpoint's Brescia: AI Moving Up the Application Stack

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