Our Favorite Posts of 2023
Thank you for reading Aspiring for Intelligence, and Happy New Year!
For our final issue of 2023, we wanted to share five of our favorite Aspiring for Intelligence posts from the year (which happened to coincide with our most viewed and shared posts).
A big thank you to all of our subscribers for being with us on this journey, and we are looking forward to what should be an incredible 2024!
Snowflake vs. Databricks
Coming off Databricks’ Data and AI Summit in San Francisco and Snowflake’s Summit in Las Vegas, we explored how two cloud giants are now battling in the AI domain, through new product lines, acquisitions, and market positioning.
Do We Really Have Too Much AI Infrastructure?
In September, David Cahn at Sequoia and a16z’s Guido Appenzeller had a thoughtful debate on whether the AI market was facing a $125B+ "hole" for CapEx required to fulfill demand. Our view was that in nearly each prior technological waves (the transcontinental railroad in the 1860s, electrification of the 1930s, or the TelCo boom of the 1990s), infrastructure costs always run high and precede demand. But that demand comes quickly, and in forms never previously imagined.
The COGS in the Machine
This was a more technical post, diving into the components of Cost of Goods Sold for AI companies. The question we were trying to answer was whether AI companies have better or worse gross margins than traditional SaaS companies? In addition to standard COGS line items like hosting and customer success, AI companies now also have to account for new expenses related to the model itself, training & finetuning, and "FM Ops".
Moats in the Era of AI
Back in January, we were discussing how AI apps and companies could build and establish moats to become durable and sustainable businesses. We felt that for AI startups to thrive over the long-term, they would need to build moats across intellectual property, data and user networks, distribution channels, user experience, and new techniques like RLHF.
What are We Seeing as VCs?
Finally, given feedback from our readers, we shared perspectives as VCs investing in early and growth stage AI companies. Given the billions of dollars flooding into the GenAI space in 2023, we emphasized that having a strong and differentiated technical approach would be key to standing out in a noisy market.
We hope you enjoyed this edition of Aspiring for Intelligence, and we will see you again in two weeks! This is a quickly evolving category, and we welcome any and all feedback around the viewpoints and theses expressed in this newsletter (as well as what you would like us to cover in future writeups). And it goes without saying but if you are building the next great intelligent application and want to chat, drop us a line!