How AI can empower startups, with Lightspeed Ventures partner Faraz Fatemi | StrictlyVC LA

I just mentioned that Jesse L of rabbit Is coming and uh you know I just I'm Wondering again you've invested in Consumer AI where is where does light Speed sort of fall on on on um like Hardware AI driven hardware and Wearables and and wearable assistance Totally I mean I think you know at large As we look at the Venture industry uh I Would very much say that AI has brought Investing in Hardware um and Hardware Adjacent businesses very much back in Style Um you know we've seen examples like Rabbit which I'm excited to get into Later today um you know companies like Rewind with their you know pendant tab Humane Etc um I think really you know The the key for a lot of these Businesses is uh you know fundamentally The personal assistant that they're Building around the core Hardware right And the utility that they're delivering To the end consumer and so you know you Think in rabbit's case a lot of the sort Of core Innovation is around the large Action model that they built which uh You know effectively will execute Specific actions on behalf of the end End user and I think that's sort of you Know more broadly representative of you Know one of the one of the benefits that AI provides to Consumers and something That we're really excited about around

Lowering the barrier to access to Previously you know unattainable Services like personal assistance um and I think the other interesting thing with You know you know unlocking AI general Assistance for consumers is um it then Unlocks sort of net new commercial Models things like you know third- party Partnerships that then lead to um you Know affiliate revenues and all that and You know I think being able to sort of Position yourself as the you know deao Interface and then build an entire Ecosystem around it uh is you know is a Great position to be in and so excited To hear more from Jesse and have you Looked at a company or have you would You fund one I mean I think a lot of People think it's fascinating um that But maybe they think you know an AI app Is more interesting you know we we've Spent time with all the different Players in the industry as a team um you Know one of my colleagues here in the Audience Mor's actually got to know Jesse quite well well um I'm excited to Get to know him later today as well um We we have not made an investment in the Space uh historically we've made quite a Few investments in in in around Hardware But uh we're very much on the lookout so Uh if anybody here is building you know In and around Ai and Hardware please Come find us great uh so one of your AI

Deals is very hot Mr all uh just raised Another big round congratulations you Know like so many AI companies that are In the news right now it's a really Young company I mean a year ago one of The founders was still at Google another One was at the meta Labs meta AI lab in Paris tell me a little bit about um how That deal came together and also why you Think it has stands a chance against Open AI absolutely so you know I think m Is you know one of the best examples of Light speed being sort of positioned as A global Venture Capital firm uh that Was very much sort of a cross- sector Cross geoc cross stage investment for us As a team and so um you know our Partners on the ground in Europe Paul Murphy Antoine morud um they they were Sort of the ones who initially broker The relationship were able to sort of You know get us an early look at uh at The business ahead of the financing um And obviously it's a space that we've Been studying quite a bit in advance you Know we've made Foundation model Investments in the past um we've been Investing in AI for you know 20 plus Years now uh you know over 50 Investments over a billion dollars Deployed in around AI in the past decade Um with MRA in particular you know I Think uh you know there were a bunch of Different considerations that went into

It largely though the under writing was Around the team uh you know that Arthur Has assembled and uh just seeing sort of The uh you know the the caliber and the Quality and their understanding around What it takes to build you know Disruptive Foundation models while also Having some of the Sovereign Considerations that come with uh you Know building one that's headquartered In the EU um that was a big part of the Initial underwrite and I think you know One of the more exciting things has just Been seeing their pace of execution Since then um you know certainly I think You know being able to push out the Quality of a foundation model that they Have in in such short time uh and be Able to do so in such a capital Efficient manner uh you know with the Most recent you know model you know Costing less than 22 million to to train Um but uh you know I think the the next Sort of thing that we're excited about With mrr and and uh you know one thing That I would I would you know stress the Group to to check out is um the as as I Think about distribution and getting the Product into the hands of consumers uh You know thinking about you know some of These recent commercial Partnerships um With you know the recent Microsoft one Being an example that Arthur you know Highlighted on on on Twitter earlier

This week um that's just one example of How you know we want to sort of Leverage Third party partners and and sort of uh Expand usage across the board and Hopefully you know be beneficial to the Entire ecosystem well speaking of Partners and the and the fact that it's Done what it has sort of very Economically compared to open AI Nvidia Is another investor which is great Nvidia is investing in lots of startups Uh you have a little bit of a better View than those of us on the outside What does Nvidia bring to the table I Mean does it does it help the company to Access chips that other people can't What are the advantages there it's a Good question so I think yes there's There's certainly preferential access uh And pricing when it comes to you know Access to to gpus um I think beyond that Uh there's you know at this point a bit Of legitimacy that you know partnering Up with one of the the big cloud players Um you know will bring to the table as Well so you know even Beyond Nvidia you Know you've seen a bunch of the Hyperscalers getting very active in you Know investing in early stage businesses Um and for them you know they're very Much as an alignment of incentives in Terms of uh you know not only sort of Lifting the entire industry but sort of Driving back you know where is a lot of

The capital going to go it's going to go To spend back to the hyperscalers and so Um you know I do think that there's Certainly alignment of business models But also um you know for startups it Brings a sense of legitimacy and and you Mentioned Microsoft too and I you know I Know the Press sort of interpreted its Investment as a bit of a way of Microsoft pushing back on regul which Are concerned about it's uh very deep Ties to open AI I just wondered what you Think of that if there's any truth to That it's a good question um you know I Don't actually personally have any Perspectives on that point uh you know I Think again for for from Mr all's Perspective a big push was you know how Do we sort of get this into the hands of Developers globally and I think you know Microsoft because it has a global Presence with Azure um you know being Able to leverage a lot of that International connectivity was was sort Of um on our side a big part of the um Big part of the rationale um and you Know hopefully one of many commercial Partnerships Come and then um last for us you know I Was just I was at up front Summit Yesterday I was listening to Brian Singerman a Founders Fund his remarks the interviewer said What is broken about Venture and I put

This in the newsletter last night um but He said um you know the thing that's Sort of most most concerning right now Is this whole wave he's thinks that all The benefits are really going to create R to incumbents because I think he said You know compared to the kind of Lumbering incumbents of yesterday year These guys are you know quote Exceedingly competent so as an investor Making trying to make investments here How do you think about that sort of very Valid uh observation yeah it's great Observation I think first I want to Highlight the fact that um you know with Upfront summon everybody being in La It's just amazing seeing you know the Entire Tech Community coming together And uh hopefully you know this events Like this are you know opportunity to to Move forward the local Tech ecosystem um So appreciate you all being here uh you Know in in regards to the comment around Sort of a lot of the value acing to Incumbents versus uh you know versus you Know Challengers I think one of the Things that we think a lot about at Least on the consumer side is where can You build Moes you know I think Obviously any startup that's coming in You know there's an advantage that you Have inherently around being able to Move quickly ship fast um and and sort Of you know build a team that can be

Nimble but I think beyond that you know Some of the modes that we think about at Least on the consumer side are um you Know either unique uh distribution Wedges or um you know are there Basically uh unique business models that You can be establishing and I think you Know an an example of this is uh you Know a few of our portfolio companies Companies like beehive and paa um with AI Innovation they've sort of been able To establish uh this sort of new Monetization model and a new Monetization approach where you can not Only you know monetize content consumers But also content creators um and and I Think you can do so in a way that a lot Of the incumbents are maybe not as well Positioned to do um and so I think that That's one mode and then I think that Really the last piece is around um you Know proprietary access to data that you Know a lot of consumers maybe may not be Comfortable giving to you know one of The larger incumbents but um you know a Challenger comes in has uh a unique Value prop centered around utility uh Which again I think in 2024 we're going To be seeing a lot around with uh you Know the shift more toward towards um You know utility based use cases and and AI applications um if you can deliver uh You know 10x better product experience Um and and sort of you know get sort of

That drive that Network effect and drive High switching cost early on with that Consumer similar otes that we've been Underwriting in consumer businesses for 20 plus years now so right great good Points same old same old I mean you know The cycle renews itself anyway thank you So much really great to talk to you and To meet you for the first time and thank You everyone um thank you All


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