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AI 2.0: Introducing Network Effects to the AI Era | by Sameer Singh | Breadcrumb.vc

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The technology world is now firmly in the AI era. Over the last few years, we have seen a ton of innovation at the foundational model layer — beyond OpenAI, we saw the emergence of Mistral, Anthropic, Meta’s Llama, Google Gemini and many more. This year, the focus appears to have shifted from foundational models to the application layer. a16z now regularly publishes a list of top 50–100 GenAI apps, and it’s hard to go a day without a new funding announcement for an AI application. Are we seeing a new wave of consumer winners, or merely early experiments that will pave the way for more successful companies down the line? Before we dig deeper, it may be useful to summarize where we are — AI is a new evolution of software. Software by itself is a commodity and is not defensible. Successful software companies rely on a handful of mechanisms to generate defensibility — economies of scale, switching costs, and most importantly, network effects. I’ll touch on the first two in this post, but w

AI Marketplaces Network Business Startup AI 2.0: Introducing Network Effects to the AI Era AI applications will need to transition to an AI 2.0 era to unlock network effects and build defensible products Sameer Singh 7 min read · Jun 18, 2024 -- 1 Listen Share Press enter or click to view image in full size I think of Character.ai as an AI 1.5 application, rather than AI 2.0 The technology world is now firmly in the AI era. Over the last few years, we have seen a ton of innovation at the foundational model layer — beyond OpenAI, we saw the emergence of Mistral, Anthropic, Meta’s Llama, Google

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