AI is expected to create a new generation of "model busters": companies that grow so rapidly and for so long that they consistently shatter conventional financial forecasts. Like Apple post-iPhone, whose performance was underestimated by 3x, these AI firms will deliver value far exceeding any spreadsheet's predictions.
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Similar to the dot-com era, the current AI investment cycle is expected to produce a high number of company failures alongside a few generational winners that create more value than ever before in venture capital history.
OpenAI's revenue projection of growing from $10 billion to $100 billion in three years is historically unprecedented. For comparison, it took established tech giants like NVIDIA, Meta, and Google between six to ten years to achieve the same growth milestone, highlighting the extreme velocity expected in the AI market.
Elon Musk theorizes that if 'applied intelligence' is a direct proxy for economic growth, the exponential advancement of AI could lead to unprecedented double-digit GDP growth within 18 months and potentially triple-digit growth in five years. This frames AI not just as a tool, but as the primary driver of a new economic golden era.
Unlike the dot-com bubble driven by fleeting startups, the AI boom is a sustainable "megatrend." It's led by established giants like Microsoft and Google, developing on a compressed 5-7 year timeline (vs. 15 years for the internet), and operating at a scale 1000x larger, suggesting longevity over a sudden collapse.
In the current market, AI companies see explosive growth through two primary vectors: attaching to the massive AI compute spend or directly replacing human labor. Companies merely using AI to improve an existing product without hitting one of these drivers risk being discounted as they lack a clear, exponential growth narrative.
The focus on AI automating existing human labor misses the larger opportunity. The most significant value will come from creating entirely new types of companies that are fully autonomous and operate in ways we can't currently conceive, moving beyond simple replacement of today's jobs.
The startup landscape now operates under two different sets of rules. Non-AI companies face intense scrutiny on traditional business fundamentals like profitability. In contrast, AI companies exist in a parallel reality of 'irrational exuberance,' where compelling narratives justify sky-high valuations.
The true economic revolution from AI won't come from legacy companies using it as an "add-on." Instead, it will emerge over the next 20 years from new startups whose entire organizational structure and business model are built from the ground up around AI.
The common analogy of AI being "like a website" that every company must adopt may be misleading. The real transformative power of AI could be in enabling entirely new, AI-native businesses that leapfrog incumbents, rather than simply being a feature tacked onto existing products.
For decades, AI only offered incremental improvements (e.g., 20% better fraud detection), which benefited large incumbents. Generative AI is a step-change, enabling entirely new user behaviors like creativity and emotional connection, creating the "1000x better" disruption needed to build new, iconic companies.