AI startup culture feels the impact of young founders

The startup scene around artificial intelligence is feeling the heat, and it’s investors who have to determine which companies are going to stand out from the pack. 

The winners of the AI race could be those who deeply understand the industry, but there is also the opportunity for young founders to bring a fresh approach, according to leading investors.

Sue Xu of Amino Capital talks with theCUBE about investing in AI.

“Small companies who have a lot more at stake, they just historically are much better at seizing new opportunities and executing on very specific things,” said Aileen Lee (pictured, second from right), founder and managing partner at Cowboy Capital LLC, dba Cowboy Ventures. “Versus a company that’s got a very large revenue base, it’s got a lot of existing customers, you’ve got a lot of legacy products that you may not want to disintermediate so quickly. There is so much open ocean for startups to really crush it when it comes to competing with big companies.”

Lee, alongside Lake Dai (pictured, second from left), founder and managing partner at Sancus Ventures, and Sue Xu (right), managing partner at Amino Capital, spoke with theCUBE’s John Furrier (left) at theCUBE + NYSE Wired: Robotics & AI Infrastructure Leaders 2025 event, during an exclusive broadcast on theCUBE, SiliconANGLE Media’s livestreaming studio. They discussed startup culture and predicting what’s next for generative AI.

Young startup leaders drive innovation

Going forward, investors are expecting to see AI applications for specific industries, such as healthcare and physics, as well as models designed to run on the edge. They are also hoping for solutions to the current compute problem, since demand for AI is rising and power is limited.

“We are going to continue to see the bottleneck compute,” Dai said. “Compute demand and consumption has gone up over a 100 times in the last three years. We’re going to see a continued pressure on how much compute that we need, how efficient we can to scale the AI applications, but also how we can be energy efficient because we are hitting the bottleneck of energy.”

AI enables founders to build a business with higher speed and lower revenue so startups are proliferating fast. In the midst of this AI gold rush, figuring out which companies are going to be “long-term winners” might seem tricky, but for Xu, it can be pretty simple.

“We felt like the growth stage investors … haven’t actually changed their criteria,” she said. “It’s still 200% year-over-year growth. If this company is overvalued and then 18 months later they don’t actually have any revenue, and then I think the growth stage investor, they normally will not pick this up even though the demo is magical. So, to us it’s very easy.”

All three investors talked about the potential for new blood to enliven the machine learning space, even as they acknowledge that AI erases many of the junior developer positions that used to be a gateway into the industry. In contrast to more experienced professionals, young founders may be more fluent with AI and less burdened by legacy technology practices.

“A lot of us are waiting for AI-native consumer companies,” Lee said. “Obviously, ChatGPT and Open AI is largely a consumer company. When you have these platform shifts … I think younger founders who don’t have all that kind of knowledge of legacy are going to be incredibly well positioned to build some really exciting new consumer products.”

Here’s the complete video interview, part of SiliconANGLE’s and theCUBE’s coverage of theCUBE + NYSE Wired: Robotics & AI Infrastructure Leaders 2025 event:

Photo: SiliconANGLE

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