AI's first wave was about cutting costs. The second wave is about building things we've never seen.

For the past several years, artificial intelligence has primarily focused on reducing expenses. However, a rising group of entrepreneurs and investors believes we're on the brink of a transformative phase in AI, often referred to as its "Second Wave." This new chapter promises to introduce innovative products, applications, games, and services that were unimaginable prior to the advent of large language models. Kylan Gibbs, a former product manager at Google DeepMind and now the head of AI startup Inworld, emphasizes this significant shift. He states, "The first wave of AI was all about making existing processes more efficient. The upcoming wave is about creating entirely new products and experiences that generate revenue rather than merely optimize costs." According to Gibbs, if AI's role is limited to cost-cutting, it merely redistributes value among current businesses. Conversely, if it fosters groundbreaking consumer products that people are willing to pay for, it enhances overall economic growth. This next stage, he argues, demands a new framework for consumer-scale AI, which includes quick response times under 300 milliseconds, the capacity to support millions of users simultaneously, and highly personalized experiences tailored to individual needs. To facilitate this vision, Gibbs launched a Silicon Valley accelerator aimed at nurturing up to 30 startups focused on developing new consumer experiences rather than simply integrating chatbots into existing workflows. This initiative has garnered support from notable venture capital firms and leaders from OpenAI, Google, and Stripe, with a demo day scheduled for early March in San Francisco. The call for innovation is echoed by Garry Tan, CEO of Y Combinator, who urges a shift from the mindset of doing things cheaper to exploring uncharted territories of possibility. Several startups are already embodying this forward-thinking approach. Sara Beykpour, CEO and co-founder of Particle, believes the tech landscape is currently in a transitional phase. At Particle, an AI-driven news platform, tasks that once took weeks can now be accomplished in mere hours. "We hold ourselves accountable in meetings to avoid falling back into outdated thinking, which we humorously refer to as 'boomer thinking,' despite our millennial identities," Beykpour remarked. This progressive mindset enables Particle to explore innovative formats, such as their newly launched Podcast Clips feature, which seamlessly integrates relevant audio snippets into news articles, enhancing user experience. On a different front, Luvu, an AI-powered fitness application, is redefining personal training. Launched in August 2025, Luvu has attracted approximately 250,000 users with its unique AI-driven approach to personalized fitness coaching. The app adapts its notifications based on user behavior, offering tailored messages that resonate on a personal level, leading to significantly higher engagement rates. In the gaming realm, Fai Nur, co-founder and CEO of the AI-based social simulation game Status, highlights the imaginative possibilities of the Second Wave. With over 3 million downloads, Status allows players to dive into AI-generated social media environments where they can role-play as various characters, encountering dynamic narratives that evolve based on their actions. For advocates of AI's Second Wave like Gibbs, the future of this technology extends beyond simple cost savings. It aims to create immersive experiences that captivate, inspire, and engage users at a consumer level. As we transition from the first wave's efficiency-driven mindset, the second wave promises to enrich everyday life with unique and interactive experiences that people will truly value.