Hankes: Most AI Value Will Accrue to Applications, Not Infrastructure
Vince Hankes · Vince Hankes: Why We Put $300M into OpenAI; Sam Altman's Pitch; Lessons from Josh Kushner | E1009 · 20VC with Harry Stebbings · May 3, 2023 · at 29:48
Vince Hankes, Partner at Thrive Capital, discusses where value will be captured in the AI ecosystem, comparing AI platforms to traditional cloud infrastructure like AWS.
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“I have to believe it's gonna accrue mostly to the application layer. I think if you think about infrastructure companies as platforms, you know, if you think about the software market as the relatives, the value of AWS and Microsoft and Google cloud versus the software companies built on top or all of the internal software tools built on top, I think it's probably an order of magnitude to one, you know, so I just have to believe where value gets created to end customers is where it will get captured. And the nice part about the infrastructure business is that they're effectively toll roads on that whole ecosystem. And so, you know, applications might compete more aggressively with each other and open AI or Amazon or the infrastructure provider might be able to clip a coupon on it. That's really valuable. We might capitalize it at a high multiple, but I just, I have to believe that there's gonna be a lot more value in the new experiences and applications than the infrastructure.”
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