Why AI startups failed until generative AI changed the economics completely
For 30 years, AI has been great technology but terrible business. The economics were never there. AI could improve existing businesses by 20 percent, which is amazing for Google or LinkedIn, but a 20 percent improvement doesn’t make a startup. The big change with generative AI is it brings the marginal cost of creation and language reasoning to zero. For example, getting a Pixar-style avatar used to cost 200 dollars from a designer. Today, a model generates it for one one-thousandth of a penny. That’s a five order magnitude cost difference, an economic dislocation that super cycles are made from.
— The Future of AI, with Martin Casado · The Keynote on AI