IBL News | New York
Three years after the generative AI boom began, most AI consumer startups still make money by selling to businesses rather than individual consumers.
This is one of the primary outcomes of TechCrunch’s StrictlyVC event in early December, where venture capitalists discussed why most consumer AI startups still lack staying power.
“A lot of early AI applications around video, audio, and photo were super cool, but then Sora and Nano Banana came out, and the Chinese open-sourced their video models. And so, a lot of those opportunities disappeared,” said Chi-Hua Chien, Co-Founder and Managing Partner at Goodwater Capital.
“I think we’re right on the cusp of the equivalent of mobile of the 2009-2010 era,” Chien said. That period was the birth of massive mobile-first consumer businesses like Uber and Airbnb.
Startups and incumbent tech companies highlighted the idea of a new personal device that could replace smartphones.
OpenAI and Apple’s former design chief, Jonny Ive, are working on what’s rumored to be a “screenless,” pocket-sized device. Meta’s Ray-Ban smart glasses are controlled by a wristband that detects subtle gestures. Meanwhile, some startups are trying, with often disappointing results, to introduce a pin, pendant, or ring that uses AI in a way different from how smartphones do.