How AI can lead to venture opportunities

At WhatAVenture, we are driven by the question of what the paths to future growth look like. Therefore, we explore how to leverage AI-based business models for business growth. This article will give you three key insights on how AI can lead to venture opportunities.

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‍AI is here to stay.  

We at WhatAVenture understand and look at AI as the broad term encompassing machine learning and deep learning, as well as systems and algorithmic architectures that enable computers to mimic biological minds. As such, AI has seen a journey of different waves – hopeful phases of optimism and hype, followed by phases of consternation and "AI-winters". It is essential to recognize that, despite these waves, the general trajectory of AI entering real life via relevant use cases is still pointing upwards. The use cases in action become more sophisticated as the models supporting them grow in accuracy and performance. This increased maturity has also led to an increase in user trust towards machine-enabled applications and products. Waymo now completes north of 300k autonomous taxi rides per month, ChatGPT in late 2024 has 1.5 billion monthly visitors.  

The adoption of AI is only going forward, while at varying speeds, we see no reason it will come to a stop anytime soon. While there is a healthy debate – and sometimes a lot of speculation - about the actual capabilities (e.g. reasoning or not) of current top models and potential paths to AGI (Artificial General Intelligence), there is no denying progress. Top-of-the-line machine learning models now achieve human-level performance across critical tests and domains.  

AI must be recognized and understood as a megatrend.    

The term AI is thrown around a lot. Above, we defined it as the encompassing title for machine learning and deep learning. Whilst this is a close framing of what it is – it is essential to look at the impact of AI from a distance and recognize it as a megatrend.  

Looking at AI as a megatrend will help us draw future scenarios, develop opportunity spaces, and imagine future market solutions. As a megatrend, AI is based on more than just what is going on in machine learning and deep learning. The megatrend has four fields contributing to its evolution: data availability, connectivity, compute, and society. Each of these fields has distinct sub-trends that make up the AI megatrend together.  

Understanding each field and sub-trend in detail helps us to know where the whole megatrend is headed. We can, for example, look at the development in the space of compute power and data centers – and imagine what the predictions in that sub-trend will mean for the rest of the AI megatrend.  

Diving deep into AI and understanding the megatrend in its full complexity takes time and effort. It will ultimately allow us to make more realistic scenarios about potential futures. It is crucial to discover and evaluate AI applications and venture ideas.  

A megatrend hitting an industry will lead to cracks, threats, and venture opportunities.  

Having recognized that AI is a megatrend and not an isolated development, we must look at the potential impact on our industry and business. As with megatrends that came before AI, the initial focus in adaptation will be on optimization of the current. Organizations will always try to apply new technology to what they already have – their processes, products, channels - and ways of conducting business. Only later will they look at opportunities outside of the norm and think of ideas that might upend industries and common practices.  

This sounds and is exciting – if we manage to be at the better end of it. However, if we misjudge a megatrend, its timing or significance, it can just as quickly threaten us and our business. New competitors might emerge, and existing ones might be better suited to adapt to new opportunities, leading to our offerings' potential irrelevance.  

Where will the venture opportunities of the future lie? A look back at the digitization megatrend shows that many new business models emerged that fully leveraged the newly mastered digitization and connectivity. Airbnb and Uber are prime examples of that. Asset-light business models that fully leveraged the benefits of digital technology that became available or mature during the digitalization megatrend.  

As venture builders, we discover, assess, and validate the opportunities of the AI age and then grow them into corporate venture success cases with our clients. Over the past few months, leveraging digital and AI experience from many years, we have developed a dedicated approach to do exactly that.