Are LLMs Hitting a Wall? VC Shifts Focus

In this episode, Molly O'Shea is joined by Eric Newcomer, founder of "Newcomer”. Eric shares insights from the New York Cerebral Valley Summit, where VCs and founders explored the move beyond foundation models to applications, the rise of AI in established businesses, and the future of creativity in a generative AI world.

Eric Newcomer, founder of the newsletter “Newcomer” on the startup and venture capital industry, discusses the evolution of the AI market and his experiences hosting the Cerebral Valley Summit in this interview. He notes a shift in focus from building foundational AI models to developing applications leveraging existing models. He highlights the emergence of AI-powered applications in various fields, including music creation, coding assistance, synthetic data generation, and customer support. He also shares his observations on the VC downturn and the challenges facing emerging managers, as well as his thoughts on the importance of innovation and the need for companies to demonstrate viable exit strategies. Newcomer expresses his enthusiasm for continuing to report on the evolving AI landscape and shares his plans for future events and expansions of his company.

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Newcomer: https://www.newcomer.co/
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Companies mentioned:
AI Companies:
OpenAI: https://openai.com/
Inflection: https://inflection.ai/
Adept: https://www.adept.ai/
Suno: https://suno.com/
XAI: https://x.ai/
Runway: https://runwayml.com/
Writer AI https://writerai.netlify.app/
Poolside AI: https://poolside.ai/
Anthropic: https://www.anthropic.com/company
Harvey: https://www.harvey.ai/
Lambda: https://lambdalabs.com/
Modal: https://modal.com/docs/guide/gpu
Databricks: https://www.databricks.com/

Other Companies:
MongoDB: https://www.mongodb.com/
Data Dog: https://www.datadoghq.com/
Spotify: https://open.spotify.com/
Salesforce: https://www.salesforce.com/
Intercom: https://app.intercom.com/
Goldman Sachs: https://www.goldmansachs.com/
Snowflake: https://signup.snowflake.com/
Thompson Reuters: https://www.thomsonreuters.com/en.html
Madrona Venture Group: https://www.madrona.com/
Sequoia Capital: https://www.sequoiacap.com/
Lux Capital: https://www.luxcapital.com/
Hewlett Foundation: https://hewlett.org/
Yale: https://www.yale.edu/

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TIMESTAMPS:
(00:00) Introduction and Evolution of the Cerebral Valley Summit
(00:44) Takeaways from the New York Summit: Shifting Towards Building Applications
(02:28) LLMs Find PMF?
(04:10) OpenAI's Transition from Enterprise to Consumer Product
(05:21) Other Themes: Creativity, Open Source, and Established Businesses
(07:44) Debate on Open Source and the Pragmatic Cycle of AI
(11:23) Themes from Breakout Groups: AI Agents and Open Source
(13:44) State of the Tech Markets and Predictions for the Future
(13:40) Sponsor: Archer
(17:07) Expectations for Q2 and Disillusionment with Foundation Models
(18:29) Breakout Group Discussion on AI Agents
(19:19) The Need for Tangible Outcomes in AI Applications
(20:07) The Risk of Overinvestment in Infrastructure without Emerging Applications
(22:12) Areas of Focus for Newcomer: Robotics, Life Sciences, and Law
(24:02) Investment Opportunities and Challenges for Startups
(26:01) Future Investment Focus: Robotics, Life Sciences, and Industries like Law and Consulting
(26:07) The Challenge Faced by Law Firms
(26:42) Emerging Companies to Watch Out For
(28:15) Potential Speakers for Future Conferences
(35:30) The State of Venture Capital
(44:20) The Future of Journalism

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