Panel, Conference Presentation
Venture Capital Investing in AI | RAISE Summit 2024 | Paris
- Paris is positioned as the emerging European capital of AI, expected to benefit from a rapidly developing ecosystem and improved governance support over the next several years, contingent on shifting corporate mindsets toward early adoption similar to the US or Israel.
- OpenAI is predicted to succeed despite competition, while the foundation model sector is expected to undergo a transition where only a "couple of winners" emerge and generic transformer models face commoditization and "death in commoditization" as hundreds of millions of dollars are invested.
- Future AI startups are expected to prioritize building differentiated technology and sustainable technical moats using deep science rather than simple LLM wrappers, with early-stage investment focusing on product-first teams with domain expertise and validated use cases.
- A funding "wall" is predicted to be hit within the next year or so, where teams without validated use cases will struggle to raise capital as the industry shifts from a focus on equity-funded model training to sustainable inference economics.
- In the healthcare sector, data value is expected to shift from clinical EHR to human feedback, with "causal density" and the integration of patient and genomic data enabling multi-modal AI to predict trajectories, while European governance initiatives like the UK Biobank and NIH are projected to pay off after 10 to 20 years.
- Investors expect to focus on founders who can identify real ROI, build trust with stakeholders to create industry-specific moats, and navigate IP rights regarding human feedback data, with Europe potentially leading the US in addressing AI and health governance questions.
- Defense tech and "resilience" in the context of war are expected to become primary focuses for top entrepreneurs once the reality of conflict is acknowledged in Europe, though current reticence remains a barrier.
- The long-term outlook projects that while hundreds of businesses will access data to create value on top of models, the number of ultra-successful foundational model companies will be limited, with high-margin fully full-stack businesses not expected for several years.