AI Becomes Table Stakes

Ben Gilbert shares his perspective on AI investments and startup differentiation, drawing parallels between AI today and software 20 years ago. He believes AI is becoming a fundamental component rather than a unique selling point.

Key Points:

• AI Investment Philosophy:

  • Not investing in pure "AI companies" despite seeing many pitches
  • Believes AI itself won't be the key differentiator for most companies
  • Views AI as becoming ubiquitous, similar to how software became standard

• Value Creation and Moats:

  • Real value comes from traditional business advantages:
    • Network effects with customers
    • Data moats
    • Lock-in through established processes
  • Companies need to use foundational AI models but can't rely on AI alone

• Market Evolution:

  • Compares current AI trend to software 20 years ago
  • Saying "we invest in AI" is becoming as generic as saying "we invest in software"
  • Believes most value will accrue to foundational model companies

• Future Business Requirements:

  • All software will need to incorporate AI to meet user expectations
  • Companies must use AI as table stakes to compete
  • Success will depend on traditional business fundamentals rather than AI innovation

• Investment Strategy:

  • Looking for companies using AI within stronger business models
  • Focusing on businesses with traditional moats and advantages
  • Avoiding pure AI plays without other differentiators

This perspective suggests that while AI is crucial for future business success, it should be viewed as a necessary component rather than a primary differentiator for startups.