2024 Ecosystem Predictions — AI’s Impact on Investing

Contributed by Justin Wilson, Plains Ventures

We conducted a video interview with Justin, and asked ChatGPT to summarize his prediction, and this was the result:

TL;DR: The next three years pose a tougher fundraising landscape, forcing founders to enhance efficiency, but this challenge presents an opportunity for exceptional companies. AI’s potential, extending beyond language-centric tasks, is set to drive value creation by enabling efficient problem-solving and better decision-making in diverse domains.

Summary

Fundraising in the next three years is anticipated to be significantly more challenging than in the past three years. The decline in available capital will compel founders, accustomed to a capital-rich environment, to enhance efficiency for survival. However, there is a substantial silver lining in this situation. Each headwind cycle in the venture capital macro environment has historically given rise to exceptional companies and founders. Those resilient enough to weather such cycles often emerge as industry leaders.

Investing, akin to life, is a reflection of values. Trying times frequently produce extraordinary individuals and, in this context, innovative companies. Viewing the current headwind as a reason to shy away from risk assets may lead to missing out on unique investment opportunities likely to yield optimal results. Investors who embrace this challenging period may ultimately achieve superior risk-adjusted returns compared to recent periods of economic growth.

The past four years marked the nation’s awakening to the realization that value creation extends beyond the coasts. This trend is expected to intensify. The groundwork for venture capital innovation has always existed, but it currently lacks the necessary capital infusion. The momentum is expected to increase as early movers venture into regions like Oklahoma and Arkansas. This influx is predicted to expand the investable universe. Despite the progress made in establishing early-stage risk capital, saturation is yet to be reached, and the establishment of growth capital remains on the horizon. This trajectory is anticipated to persist until a future equilibrium is achieved.

The role of AI is poised to play a significant part in shaping our future. Although the impact of OpenAI large language models (LLMs) has been profound, it has led to a misconception that AI’s capabilities are confined to chatbots and uncanny valley images. In reality, AI is a versatile productivity tool with applications across various domains. Its value lies in solving problems efficiently and transforming the way we operate. Investment opportunities in AI extend beyond LLMs. While current consumer prompting tools demonstrate its application, AI’s broader and deeper potential lies in its ability to create value by addressing customer needs and generating returns for investors. AI’s true power lies in facilitating better decision-making across diverse domains.

Language, often misunderstood as a representation of one’s understanding of the world, is, in fact, a tool for communicating that understanding to others. OpenAI’s LLMs, including ChatGPT, serve as communication tools for abstract thinking rather than being limited to the English language. AI’s role is not restricted to language-centric tasks; it encompasses numeric analytics. Companies leveraging AI tools for data-driven decision-making, whether involving language or not, are anticipated to achieve significant value and success.

ChatGPT Q&A

Q: How many tools have been created using ChatGPT?

A: As of my last update in April 2023, ChatGPT has been integrated into a variety of tools and applications, but there is no comprehensive, up-to-date count of all such tools. The integration of ChatGPT spans various domains including but not limited to:

1. Educational Tools: Apps for learning and tutoring, where ChatGPT can answer questions, explain concepts, and provide practice problems.

2. Business Applications: Tools for automating customer support, generating reports, and enhancing business communication.

3. Creative Writing Aids: Assisting in brainstorming, editing, and generating content for writers and content creators.

4. Programming Assistants: Tools that help in code generation, debugging, and explaining programming concepts.

5. Entertainment Applications: Including interactive storytelling, gaming, and chatbots for various forms of digital entertainment.

6. Productivity Tools: Integrations in task management, note-taking apps, and personal assistant applications.

7. Language Learning Platforms: Assisting in language practice, translation, and comprehension exercises.

8. Research and Data Analysis: Aiding in information gathering, summarizing research papers, and data interpretation.