An OpenAI researcher turned venture capitalist says investors are 3 to 5 years behind the latest AI studies

A significant gap exists between the current AI investment landscape and the latest research developments, according to Jenny Xiao, a former AI researcher who transitioned into venture capital. As a co-founder of Leonis Capital, established in 2021 after her tenure at OpenAI, Xiao emphasized that the existing excitement surrounding AI investments is lagging by approximately three to five years compared to what is being explored in academic circles. Speaking on a recent episode of the Fortune Magazine podcast, Xiao pointed out the stark difference between discussions happening at major AI conferences and the cutting-edge ideas being pursued by researchers. "There is a massive disconnect between what researchers are seeing and what investors are seeing," she remarked, highlighting the urgent need to bridge this divide. Having previously abandoned a Ph.D. program in economics and AI to work at OpenAI, Xiao launched Leonis Capital with the aim of merging venture capital with deep academic research in AI. She stressed that the AI sector requires a new generation of founders and venture capitalists who are well-versed in the technology. Unlike Software as a Service (SaaS) companies, which tend to operate on a stable technological foundation, AI is rapidly evolving, necessitating that investors cultivate a technical understanding comparable to that of the innovators they support. For investors who may not have deep technical expertise, Xiao shared a key piece of advice: "AI progress isn't linear." She explained that advancements occur in bursts rather than a steady progression. Thus, framing inquiries about the pace of AI development as either slowing down or speeding up may not accurately reflect the reality. Instead, she suggested that the truth lies somewhere in the middle, underscoring the complex nature of AI evolution. Leonis Capital has not yet provided a response to inquiries from Business Insider.