The interviewer notes that 40% of companies on the Forbes AI 50 list fell off within a year, illustrating that predicting which AI company ultimately captures value is getting much harder, echoing history where first movers like early search or social networks didn't win. ✦ AI generated
Interviewer · a16z Podcast · 2026-05-29 · original ↗
starts at this moment · 11:29
every year Forbes comes out with their AI 50 startups list. And what was really interesting was, you know, from from last year to this year, 40% of the companies that were on that list last year dropped off... So, like the half-life of these companies feels kind of incredibly short.
verbatim transcript · starts at 11:29
11:29and you one of the things we we track is, you know, every year Forbes comes out with their AI 50 startups list. And what was really interesting was, you know, from from last year to this year, 40% of the companies that were on that list last year dropped off. >> Wow. >> So, like the half-life of these companies feels kind of incredibly short. >> Yes. >> So, you know, that the I think I think
11:50where our kind of priors have have evolved a bit is, yes, we think the outcomes are going to be much larger, but trying to predict who captures that feels like it's getting much harder. >> Yeah. >> Is that something that you guys are seeing like internally in your portfolios? >> Yeah, it is getting it's getting much harder because the shift in the technology has happened so much faster.
12:09And so, you know, we always talk with our founders about, you know, the the shifting sands underneath you. Like that is very, very true. And our priors have been updated a ton about where value is going to be captured. >> Yeah. >> You know, when we first we invested in, as you know, OpenAI before ChatGPT. And you know, there were moments of time in the early days where we said like model
12:30companies are going to be everything. There's never going to be any more application companies. They're all going to go away. And then we went through a cycle where we said there's going to be application companies for everything and the model companies are just going to be APIs. And then now we're back in this moment where the model companies are kind of legging their way up into the
12:44application. And you know, this is their biggest way to drive stickiness. Um so, as it relates to assessing something's place in the world, first of all, like right now, you have to be in the token path. Like that is the number one thing that we're looking to for our companies. And um the reason that's so important is what I had said earlier. So, there's actually cost pressure happening at buyers of
13:07technology already. Like very it's happened very fast. Um so, they're not going to be increasing budget for things that are like previous generation software. In fact, they can't even cover the growth in their costs that is happening from AI with that with reductions in that. So, there's going to be pressure on those. Um and you know, honestly, it's probably going to have to come from either higher