Disrupt Edition
The Age of AI is just beginning.
It has been a few years since I attended TechCrunch Disrupt. Gené, my wife, as many of you know, was the original backstage organizer of the event, and for many years, as a founding shareholder, I observed it backstage.
This week, I was a regular attendee. Many TechCrunch staff would not know I was there when TechCrunch was started or even recognize me. It was great.
I mention it because this week’s essays and news items focus on disruption. AI is disrupting faster than anything I have seen in my 4.5 decades in tech and venture capital.
One thing becomes crystal clear: The AI revolution isn't just continuing—it's accelerating. The pace of developments is proving wrong the skeptics who predicted a slowdown or stalling in AI innovation.
In his analysis of "Meta's AI Abundance," Ben Thompson makes a compelling case for Meta's potential dominance in the AI landscape measured by how it impacts users and customers. He highlights Meta's unique advantages, including its massive data sets, existing infrastructure, and willingness to invest heavily in AI.
Edmar Ferreira, in his insightful piece "Why Building in AI Is Nothing Like Making Conventional Software," makes a critical point: traditional software development approaches don't work for AI products due to the fundamentally different risk profiles involved.
While conventional software development focuses on feasibility, value, and viability, AI development throws a curveball with its inherent stochastic nature. This stochasticity, where outputs can vary even with identical inputs, introduces a level of uncertainty that requires a more experimental and iterative approach. Developers must prioritize testing and "tuning" AI models before building software around them, a stark contrast to the linear processes of traditional software development. This shift necessitates a fundamental change in mindset for developers and investors alike.
OpenAI's launch of ChatGPT Search is another significant development with the potential to disrupt the search engine market. By integrating web search capabilities directly into ChatGPT, OpenAI offers users a streamlined and AI-powered alternative to traditional search engines. Powered by GPT-4o, ChatGPT Search aims to provide "timely answers" by drawing from various online sources. This bold move positions OpenAI as a serious contender to Google's dominance in search and could reshape how we access information online.
Skeptics will point to the challenges—the unpredictability of AI development, the need for new development methodologies, and the capital requirements—but they're missing the bigger picture. These aren't obstacles; they're opportunities. The companies and investors who understand this are positioning themselves for unprecedented success.
But while the AI world charges ahead, the venture capital landscape faces its challenges. The rise of "Zombie VCs"—firms unlikely to raise new capital or back new startups—is a concerning trend highlighted by Chris Harvey. This phenomenon is a direct consequence of the Great VC Reckoning, with a surge in new VC funds between 2020 and 2022, followed by a sharp decline in investment activity and subsequent illiquidity.
This reckoning underscores the importance of sound fund modeling and strategic decision-making for VC success, as David Cruz e Silva emphasized in "Why VCs need to master fund modeling."
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Looking ahead, a few things seem clear:
Amidst these shifts in AI, TechCrunch Disrupt provided another dose of inspiration. Salva Health, the winner of this year's Startup Battlefield, exemplifies the power of technology to address real-world problems. By developing a portable device for early breast cancer detection, Salva Health is taking aim at a critical healthcare disparity, particularly in Latin America. Applied AI like this will become more common.
The message for investors and entrepreneurs is clear: The AI revolution isn't slowing down—it's speeding up. The time for hesitation is over. Those who embrace this transformation, who understand that AI development requires new approaches and methodologies, and who are willing to experiment and adapt will thrive in this new era.
The question isn't whether AI will transform technology and society—it's who will lead that transformation. Based on this week's developments, the leaders are already emerging. They're the companies and investors who understand that AI isn't just another technology trend—it's the foundation of the next era of human progress. That suggests OpenAI, Anthropic, and a new wave of applied AI startups are the ones to watch.
That said, Apple's recent actions, acquiring Pixelmator and expanding its deal with Globalstar, signal its ambitious plans for the future. The acquisition of Pixelmator, a Mac-centric photo editing application, marks Apple's first foray into the professional editing space since discontinuing Aperture in 2014. This move suggests Apple's renewed interest in catering to experienced users and expanding its creative software offerings.
Apple's commitment of $1.1 billion to Globalstar for satellite services is another strategic move that hints at its vision for ubiquitous connectivity. This expanded deal, coupled with Apple's 20% ownership stake in Globalstar, underlines the growing importance of satellite technology in Apple's ecosystem. This investment could lead to enhanced satellite features on iPhones and potentially pave the way for new devices and services reliant on satellite communication. Starlink can already offer a 5G service from space. Soon, even 5G may be moot. And mobile signal companies may be left in the dust.
This week has been a testament to the transformative power of technology. AI is rapidly reshaping industries, from software development to venture capital, while innovative startups like Salva Health offer hope for a brighter future. And as tech giants like Apple and OpenAI make bold moves, we stand on the cusp of a new era defined by connectivity, personalization, and the democratization of information. It is an exciting time to be an innovator, an investor, and a witness to the unfolding technological revolution.
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Hat Tip to this week’s creators: @edmarferreira, @stratechery, @JeffBezos, @mariogabriele, @dave_bcs, @cartainc, @PeterJ_Walker, @KevinDowd, @DavidSacks, @ethanjruby, @hamishmckenzie, @kevinweil, @ajkeen, @ProfAndrewScott,@hellabella___, @Techcrunch
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