Index Venture AI Series

Every Software Application Will Incorporate AI

First – products that leverage AI to enable brainstorming, storytelling, and open-ended creative workflows. We are already seeing this in the world of concept art and copy writing.

the stakes are low,

the processes are highly manual today

humans are in the loop.

Second – AI applied to specialized knowledge-work like engineering, law, or medicine

the human expert will still be in the loop to audit output

processes are highly manual today so the ROI is easily measurable

Third – embedding more AI tools into enterprise and prosumer workflows, exemplified by our 2020 investment in

Hebbia⁠

, an AI-powered enterprise search platform for knowledge workers.

These products will help users communicate more efficiently, absorb more information, search and act on data more quickly; they will boost general productivity.

The adoption of AI will change the software value chain

Cloud Computing → SaaS

first, we believe that within a decade, AI will be a core component of every piece of application software that’s built and shipped. Second, that this wave will be powered by the widespread adoption of foundation models.

a new class of company emerging that will specialize in maintaining the latest up-to-date foundation models based on the most cutting-edge research

(cloud vendor)

expensive, requires deep knowledge to train and administer large models, and like cloud vendors the product over time is somewhat commoditized; the value comes from their massive scale. Most of these companies, like the cloud vendors themselves, are operating with some sort of pay-by-volume business model.

At the application layer, we believe that over time business models will shift to capture more customer-specific value unlocked by AI

The adoption of machine learning will resemble the adoption of Databases.

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