Issues with AI Startups + Cash Burn with Casber Wang, Partner at Sapphire Ventures

I know today we want to talk a little bit about AI startups and particularly, I think, your point of view that you see issues with AI startups and also, you know, cash burn, right? So with that, I kind of want to lead into like, you know, what are the issues that you see with AI startups?

I wouldn't say to use the word issue.

Alex, I would probably first level set, right? We, ChatGPT came out in November 2022.

And that's kind of a watershed moment for generative AI, right? Like specifically large language model generative AI.

There'd be a lot of AI companies before that that's not gen AI.

But November 22 is really the watershed moment.

And we're barely less than two years in.

And remember I said when I graduated, Amazon broke out AWS revenue contribution.

And that was seven years before Amazon.

Amazon actually built AWS.

So when you think about the time horizon difference, now we're less than two years into the Gen AI journey.

We're still so early into the journey that, you know, I think that's why folks feel like there's so much attention, so much media attention, so much founder attention paid to the AI topic, but there's not as much getting made, right? Getting produced from an actual product perspective outside of maybe ChatGPT and five other you know, products, right? I think it's just going to take a little bit more time.

And that's not necessarily a bad thing, right? Like the other mental framework I have in mind is, let's just say we, you know, intentionally freeze the progress of technology.

Let's say there's no chat GPT-5, there's no GPT-6.

It's only what we have today, GPT-4.0 and some of the other, you know, Cloud 3.5.

I believe the next five years, we can just build applications on those existing technology without underlying technological progress, right? So that's how much progress we made from the starting point, right? So to me, it's less so of why haven't we been seeing much progress yet? It's just all the systems take a little bit more time, right? People get used to a new thing.

And that just takes more time than I think folks had expected, just given how much attention there is around this topic.

I know today we want to talk a little bit about AI startups and particularly, I think, your point of view that you see issues with AI startups and also, you know, cash burn, right? So with that, I kind of want to lead into like, you know, what are the issues that you see with AI startups?

I wouldn't say to use the word issue.

Alex, I would probably first level set, right? We, ChatGPT came out in November 2022.

And that's kind of a watershed moment for generative AI, right? Like specifically large language model generative AI.

There'd be a lot of AI companies before that that's not gen AI.

But November 22 is really the watershed moment.

And we're barely less than two years in.

And remember I said when I graduated, Amazon broke out AWS revenue contribution.

And that was seven years before Amazon.

Amazon actually built AWS.

So when you think about the time horizon difference, now we're less than two years into the Gen AI journey.

We're still so early into the journey that, you know, I think that's why folks feel like there's so much attention, so much media attention, so much founder attention paid to the AI topic, but there's not as much getting made, right? Getting produced from an actual product perspective outside of maybe ChatGPT and five other you know, products, right? I think it's just going to take a little bit more time.

And that's not necessarily a bad thing, right? Like the other mental framework I have in mind is, let's just say we, you know, intentionally freeze the progress of technology.

Let's say there's no chat GPT-5, there's no GPT-6.

It's only what we have today, GPT-4.0 and some of the other, you know, Cloud 3.5.

I believe the next five years, we can just build applications on those existing technology without underlying technological progress, right? So that's how much progress we made from the starting point, right? So to me, it's less so of why haven't we been seeing much progress yet? It's just all the systems take a little bit more time, right? People get used to a new thing.

And that just takes more time than I think folks had expected, just given how much attention there is around this topic.