Elad Gil on which AI markets have winners — and which are still wide open

Elad Gil, a prominent solo venture capital investor, made headlines at TechCrunch Disrupt, sharing insights on the unpredictable nature of the AI boom. With investments in nearly every successful tech company of the past decade, he has a front-row seat to the evolving landscape of artificial intelligence. Gil noted that while several segments of the AI market are dominated by established players, numerous opportunities remain available for new entrants. He began investing in generative AI back in 2021, a time when the technology was still flying under the radar. Gil recognized the substantial advancements made from GPT-2, released in 2019, to GPT-3 in 2021, predicting that these changes would have significant implications for the future of AI. As he backed early-stage startups harnessing large language models, Gil’s portfolio included foundational model developers such as OpenAI and Mistral, alongside application-focused companies like Perplexity and Abridge. He reflected on how the rapid pace of innovation in foundational models has continually reshaped the AI market landscape, stating, "AI is the one market where the more I learn, the less I know." This underscores the inherent uncertainty still present in many AI sectors. Despite this unpredictability, Gil identified certain areas with apparent market leaders. In foundational models, giants like Google, Anthropic, and OpenAI have emerged as frontrunners, even as countries like South Korea strive to produce their own models. He also pinpointed AI-assisted coding as a sector with dominant players, including Anthropic's Claude Code and OpenAI's Codex, making it challenging for newcomers to enter the field. In medical transcription, he highlighted Abridge as a leading player, alongside others like Ambiance. Customer support is another domain where established companies, including his own portfolio company Decagon, which recently raised $131 million, are gaining traction. However, Gil also noted several markets that remain wide open, particularly in financial technology, accounting, and AI security. He expressed that rapid growth is no longer a reliable indicator of a company’s potential success, citing how large enterprises are now eagerly exploring AI strategies that they would have avoided just two years ago. As companies experiment with AI, the initial revenue spikes may not guarantee long-term sustainability. Gil emphasized the need to differentiate between fleeting trends and viable business models, highlighting legal AI startup Harvey as one that has proven its worth, achieving impressive valuation increases in just a few months.