Is AI the new Cloud

Author

Matt Ober
April 15, 2024

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AI is feeling very similar to the Cloud rush many years ago. At first, AI is a differentiator for companies, but eventually it becomes table stakes

For many years we would hear “How were they able to build so quickly? This would have never been possible 10 years ago!” It was companies talking about building on AWS and leveraging the cloud. It was cheaper, faster, more scalable, and allowed smaller teams to compete.

AI right now, for the companies integrating it at the application layer, they are winning. They are moving fast, they are innovating, they are grabbing market share or opening up new markets. But eventually, does this just become part of most tech stacks? Does it become similar to cloud technology where you have it as part of your build, but it’s not the emphasis of your pitch deck or branding?

It’s something I have been thinking about a lot lately. It seems clear the winners of building, owning, and offering AI capabilities will be the Googles, Meta, Microsoft, Databricks, and maybe 1-2 other behemoths in the world. Others will get acquired or slowly fade away. Cloud adoption is still continuing, but for the most part, everyone is using the cloud or is aware of it. You don’t see startups pitching you with cloud as the reason why they will win.

I think AI is going in the same direction. Every company will integrate. Our companies at Social Leverage have great partnerships with Amazon and Google where they get access to cloud credit once they join our portfolio. This is a game changer as their costs for storage and compute are subsidized in the early years. Now they can leverage the AI capabilities these firms offer. This is still early, but thinking about integrating AI from the very beginning of a companies start will change way companies develop their roadmap. So does AI become just like cloud? Just another piece of the tech stack that everyone comes to expect? I think so. How soon? Probably 10 years away from larger adoption, but it’s coming and quickly. Why 10 years? AWS launched about 20 years ago and we are still seeing adoption, but for the most part companies build in the cloud, especially startups so for AI, assuming we see quicker adoption given the speed of how technology is changing, I think it will take half as long to get broader adoption.

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