Long posts

"In other words; you probably can’t build a brain in a can that can solve all kinds of problems: you’re probably going to be a consulting and services company. In case you aren’t familiar with valuations math: services companies are worth something like 2x yearly revenue; where software and “technology” companies are worth 10-20x revenue. That’s why the wework weasel kept trying to position his pyramid scheme as a software company. The implications here are huge: “AI” raises done by A19H and people who think like them are going to be at much lower valuations. If it weren’t clear enough by now, they said it again:

To summarize: most AI systems today aren’t quite software, in the traditional sense. And AI businesses, as a result, don’t look exactly like software businesses. They involve ongoing human support and material variable costs. They often don’t scale quite as easily as we’d like. And strong defensibility – critical to the “build once / sell many times” software model – doesn’t seem to come for free.

These traits make AI feel, to an extent, like a services business. Put another way: you can replace the services firm, but you can’t (completely) replace the services.