At a recent TechCrunch StrictlyVC event, prominent venture capitalists Chi-Hua Chien of Goodwater Capital and Elizabeth Weil of Scribble Ventures discussed the trajectory of generative AI startups, observing that most continue to derive revenue from business-to-business (B2B) sales rather than consumer applications. Their remarks highlighted a perceived lag in specialized consumer AI product adoption, contrasting with the rapid uptake of general-purpose large language models (LLMs).
Chien noted that early consumer AI applications in video, audio, and photo, while initially innovative, faced rapid obsolescence as platform features integrated similar capabilities or open-source models emerged. He drew a parallel to the early smartphone era, where popular third-party apps like flashlights were quickly absorbed into the core operating system, diminishing independent market opportunities.
The venture capitalist suggested that the AI platform landscape requires a period of "stabilization" before transformative consumer applications can flourish, akin to the 2009-2010 mobile era that saw the rise of major mobile-first businesses. Chien identified Google's Gemini reaching technological parity with ChatGPT as a potential indicator of this impending stabilization. Weil characterized the current state of consumer AI applications as an "awkward teenage middle ground."
Both Chien and Weil posited that the emergence of new hardware beyond the smartphone might be crucial for unlocking AI's full consumer potential. Chien argued that smartphones, utilized frequently but capturing only a small fraction of a user's visual context, are inherently limiting for advanced AI use cases. Weil echoed this, suggesting the current smartphone form factor might not be the primary platform for future AI development. This perspective aligns with ongoing efforts by companies like OpenAI, reportedly collaborating with Jony Ive on a "screenless" device, and Meta, which has introduced Ray-Ban smart glasses, alongside numerous startups exploring AI-enabled pins, pendants, and rings.
Despite the focus on new devices, Chien proposed that certain non-device-dependent consumer AI offerings, such as personalized AI financial advisors, could emerge. Weil similarly anticipated ubiquitous, "always-on" AI tutors delivered via smartphones. However, skepticism was expressed regarding nascent AI-powered social network startups, which Chien characterized as creating "single-player game" experiences where AI bots interact with user content, potentially undermining the human interaction fundamental to social networking.
