It's a move that defies so much conventional startup wisdom that one has to stop and ask why. Here is a company that raised US$1.5 billion. The personalities involved are some of the best-known names, both on the founders’ and funders’ lists. For such a well-funded, high-profile company’s founders to walk away from their vision in a few quick months is an event with no parallel.
This analyst has repeatedly talked about
a. Instant copiability of ideas
b. The crazy pace of change or “The Super Moore” era
c. And the sheer unpredictability of changes afoot
from the time we started the series, roughly a few weeks before Inflection.AI got its USD1.3bn. For more than 60 articles, we have talked about the field being the land of the giants and the need to retain the option to change the opinions as a result. If one of the world’s biggest AI gurus, Mustafa Suleyman, feels the need to change his opinion despite a billion in the company’s bank accounts, all of us lesser mortals must pay heed.
Let us repeat: in this Super Moore era, there are things that are doubling every two to three months and not two to three years. First-mover advantage, a golden rule of the internet era, is losing its grip. In the age of AI, ideas are replicated and surpassed within days and weeks. This dynamic represents a stark departure from the internet boom, where being first to market with a concept carried tremendous value. The network effects and user loyalty that early entrants could cultivate meant that copycats arrived too late to knock them off their perch.
Even the biggest field experts struggle to forecast what will happen next when announcements like Sora or Devin come in every week. In this frenetic reality, raw ideation holds less importance. The companies positioned to dominate are not necessarily the ones devising the most clever concepts but rather those that can leverage existing resources and institutional knowledge to bring game-changing AI solutions across the "last mile" to market and user adoption.
Dominant giants enjoy clear last-mile advantages - be it through proprietary data troves, brand power, established distribution channels, or manufacturing prowess. While cash-flush upstarts can innovate at incredible speeds, a lack of sufficient time to productize from lab to living room can render even brilliant innovations toothless.
Investing in the theme through listed space is also important because public markets allow investors to change opinions when facts change. Plus, the giants have also become the biggest VC funds. And unlike their financial market brethren, they can make the founders of the companies they fund close and join them, as we learn now!
