PodcastsThe Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch20VC: Why OpenAI Will Become an Infrastructure Play, Why Apple Will Win in an AI World, Why Google is the Most Vulnerable Incumbent, Will LLMs Be Commoditised, Which Startups Are Thin vs Thick Wrappers on Top of LLMs with Jeff Seibert, Founder @ Digits

20VC: Why OpenAI Will Become an Infrastructure Play, Why Apple Will Win in an AI World, Why Google is the Most Vulnerable Incumbent, Will LLMs Be Commoditised, Which Startups Are Thin vs Thick Wrappers on Top of LLMs with Jeff Seibert, Founder @ Digits
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The PitchWed Nov 22 2023
OpenAI's Evolution:
- Jeff Seibert views OpenAI as potentially evolving into an infrastructure company like AWS, facing significant challenges ahead.
- Considers Apple well-positioned to win in an AI world due to their control over silicon and potential for pioneering small models running on devices with custom silicon.
Pivoting in Startups:
- The art of the pivot is highlighted, emphasizing the need for founder instinct and conviction when recognizing a closing window of success for the current business direction.
- Founder advises being intentional, decisive, and going all-in on a new direction while ensuring there's at least a year of cash left.
Leadership Lessons from Peter Fenton:
- Peter Fenton's ability to distill markets into high-level talking points is praised; his clairvoyance about large opportunities and relentless push for adjustment is deemed impressive by Jeff Seibert.
- Trusting team members' commitment to a new direction is emphasized, as disagreeing and committing may not fully align team efforts behind the pivot.
Future of Language Models (LLMs):
- Predicts commoditization of LLMs driven by market forces and the motivation for open-source equivalents, citing Meta's potential move towards open sourcing its work.
- Discusses potential specialization of LLMs for different use cases and envisions companies leveraging multiple LLMs or training in-house models depending on specific needs.
AI Infrastructure and Open Source Models:
- The speaker predicts the emergence of a common, open-source base Language Model (LLM) with tools for fine-tuning, foreseeing it to be a popular alternative.
- They emphasize the significance of data quality over size when training LLMs and speculate on the future specialization of LLMs into vertical-specific models.
Challenges in AI Adoption and Transition:
- The conversation delves into the speed of adoption and transition in tech waves, comparing mobile technology's adoption timeline with that of AI.
- There is an emphasis on how AI could disrupt industries faster due to lower barriers to entry compared to prior technological shifts.
Vulnerabilities Among Tech Companies:
- Google is identified as the most vulnerable incumbent due to its heavy reliance on search-related revenue. The discussion revolves around potential strategic moves for Google in response to evolving AI trends.
- The vulnerability of startups building thin wrappers on top of existing AI models is highlighted, emphasizing the risk associated with these ventures.
Startup Investing Realities:
- The speakers share insights based on their experiences as angel investors, discussing portfolio performance and lessons learned from successful and failed investments.
- Market timing and early valuation are emphasized as crucial factors contributing to investment success or failure.
Founder Support and Portfolio Management:
- The topic centers around investor decisions regarding requesting cash back from struggling startups, weighing scenarios where founder commitment plays a key role.
- Discussion touches upon supporting founders versus seeking cash back based on founder determination, team performance, and decision-making patterns.
Fraud in Investment Portfolios:
- The conversation explores the prevalence of fraud within investment portfolios, speculating about potential unearthing of such instances beyond what has been publicly disclosed so far.
Talent Migration and Job Security:
- Potential crash in valuations leading to layoffs and financial struggles for companies.
- Dilemma faced by employees at high-valued companies with underwater options, considering safety versus leaving for earlier stage companies.
- Contemplation on talent migration from later-stage to earlier-stage companies due to higher talent density but concerns about compensation alignment.
Climate Change and Global Impact:
- Concerns about runaway climate change being less than 10 years away and its implications on catastrophic weather events and global impact.
- Reflections on the unfair distribution of impact and causes, particularly in emerging economies that have been historically disadvantaged.
AI's Impact on Jobs and Competition:
- Contrarian view that AI will drive productivity rather than replace jobs, attributing popular narratives to fear-mongering tendencies.
- Emphasis on customer focus over competition awareness for startups, highlighting the importance of vision and product management.