Not all early-stage AI startups are created equal
The AI sector and the challenges faced by founders and investors.
Key points:
- The AI sector has become increasingly popular in the past year.
- Unlike previous venture fads, the AI sector already had established startups and legacy players.
- AI exits and potential government regulation add complexity to the ecosystem.
- Entrepreneurs are entering the sector, and investors are seeking startups with potential for substantial growth.
- Investors are looking for companies with a competitive advantage or moat.
- Deep-pocketed players like Microsoft, Google, and OpenAI are actively building in the AI category.
- Some investors are cautious about startups building on top of existing large language models.
- Building on someone else's model may not lead to transformative businesses.