Elad Gil On Which Ai Markets Have Winners — And Which Are Still Wide Open

Solo VC investor extraordinaire Elad Gil said on shape astatine TechCrunch Disrupt that AI has been 1 of nan slightest predictable tech booms he’s ever seen.

Gil is connected nan headdress array of virtually each deed institution of nan past decade, including galore of today’s starring AI companies.

Still, he thinks that complete nan past year, definite AI markets look to beryllium astir sewn up by marketplace leaders. Beyond these areas, a immense swath of AI remains anyone’s game.

“I started investing successful generative AI successful 2021 … astatine nan time, not very galore group were paying that overmuch attraction to it,” Gil said. But he had seen nan monolithic leap successful capacity betwixt GPT 2, launched successful 2019, and GPT 3,  launched in 2021. “The measurement betwixt 2 and 3 was truthful ample that if you conscionable extrapolated retired nan scaling laws, aliases nan curve, past you could really presume that this was going to beryllium incredibly important,” he said.

That convinced him to commencement backing early-stage startups building products powered by ample connection models. His bets included some foundational exemplary makers for illustration OpenAI and Mistral, arsenic good arsenic exertion companies for illustration Perplexity, Harvey, Character.ai, Decagon, and Abridge. Yet passim 2024 and overmuch of 2025, nan capabilities of foundational models leaped pinch each release, upending AI each fewer months.

“I utilized to opportunity astatine nan clip that AI was nan 1 marketplace wherever nan much I learn, nan little I know. Usually, nan much you study astir something, nan amended you cognize it, nan easier you tin foretell nan future, etc. But AI was conscionable hazy. There’s conscionable excessively overmuch uncertainty. And I deliberation there’s still markets for illustration that successful AI,” he said.

However, he’s besides now seeing markets pinch clear winners. The astir evident illustration is pinch foundational models themselves. Even though hundreds of models exist, and immoderate countries for illustration South Korea are still moving now to create sovereign models by section companies, leaders person emerged. “Google, Anthropic, OpenAI, possibly xAI, possibly Meta, possibly Mistral — it’s for illustration a handful,” he predicts of nan winners.

After models, he thinks AI-assisted coding has runaway winners that will make it difficult for caller entrants to drawback up. Not only person nan foundational exemplary makers moved successful (Anthropic pinch Claude Code, OpenAI pinch Codex) but startup leaders for illustration Anysphere’s Cursor and Cognition’s Devin (which acquired Windsurf) will beryllium difficult to beat. And location are well-funded startups like Magic (whom Gil called a imaginable “outlier”) aliases Poolside connected their tails.

He sees aesculapian transcription arsenic being cornered, with Abridge a beforehand runner and a fistful of others for illustration Ambiance being “important.”

He names customer support – which was an early target of some accepted AI and nan caller harvest of AI supplier startups – arsenic having hard-to-catch marketplace leaders, specified arsenic his portfolio institution Decagon. (It raised $131 cardinal astatine a $1.5 cardinal valuation in June.) OpenAI president Bret Taylor’s startup, Sierra, competes successful this space. This is besides an area wherever nan incumbents — Salesforce, Hubspot, and galore others — are adding AI offerings.

So which markets look wide open? Gil says financial tooling (fintech), accounting, AI security, and “other markets that we cognize are by default very interesting. We conscionable don’t cognize who’s going to do it.”

Ironically, accelerated maturation isn’t nan awesome it erstwhile was that a institution is going to beryllium a breakout hit. “The CEOs of each large institution are fundamentally telling their teams, hey, we person an edict. We request to fig retired our AI strategy,” Gil said. “These elephantine enterprises are consenting to effort things that 2 years agone they ne'er would person tried, and it’s only because of AI.”

So caller AI markets tin onshore a batch of gross from big-name, endeavor customers quickly, “but that doesn’t mean they’re going to stick,” Gil points out.

It is only aft a marketplace goes done its trial-phase roar rhythm that a startup and investors tin spot if this gross will enactment and grow. “There’s mendacious signal, and past there’s worldly that is conscionable working,” Gil said. He calls retired ineligible AI startup Harvey arsenic 1 of nan market-leaders that’s “just working.” It raised 3 monolithic rounds successful 2025, leaping from a $3 cardinal valuation to $5 billion to $8 billion, successful conscionable a fewer months.