Components of AI Stack & Opportunities for Founders

Sachin's Take : The cloud became mainstream around 2012-2013, prompting thousands of companies to develop top-tier products spanning hardware, security, data, B2C and B2B applications. We are currently witnessing a significant shift in the Generative AI landscape, which is poised for further expansion. This presents founders with abundant opportunities to establish successful companies.

AI Stack

A simple first principle's way of thinking the stack is the four layered approach

Applications	ChatGPT, Gamma
Models	Anthropic, Open AI
Cloud	AWS, Azure, Google Cloud
Chip	Nvidia, Databricks

Each layer can be subdivided into numerous sub-layers, each representing a distinct problem space that founders should thoroughly comprehend and innovate within.

Here are a couple of AI infra market map

The new Data and AI market Map by BVP

(Source)

AI Infra map by Sapphire Ventures

(Source)

Founder's Dilemma - Have I missed the Gen AI bus?

Generative AI represents the future of technology, currently in its nascent stage. Many of the challenges within this domain have yet to be fully understood. The entire infrastructure is still under development, with the initial version expected by 2025/26. This phase will introduce first-generation products addressing both business and personal applications. Innovation will be crucial for survival; any first-generation company that fails to innovate risks obsolescence, presenting a significant opportunity for new founders to enter the Generative AI arena.

Example : Browsers have evolved since Tim Berners-Lee created world's first browser "World Wide Web" in 1990s. (Source)

Founders should never think that they missed the Gen AI wave in 2023 or 2024. This wave will become a tsunami in the coming years (2023+ Gen AI Tsunami is like 90s Dotcom Boom).

So, how can founders tackle their dilemmas? Here are a few tips:

1. Take inspiration from the browser wars: It's never too late to build a product as long as it effectively addresses the right problems for your customers.

2. Thoroughly understand your customers and their pain points, then develop superior products to outperform incumbents.

3. Secure your first 100-1000 customers through your most effective channels to gauge product-market fit.

4. Identify your initial 1-5 paying customers and focus on securing repeat purchases.

5. Scale your operations to cater to thousands and eventually millions of customers.

Gen AI is here to stay!