The AI Gold Rush: Why Selling AI Isn’t the Real Prize
There’s a fascinating paradox in the tech world right now: everyone’s talking about AI, but the real winners might not be the ones selling it. This idea, championed by venture capitalist Chi-Hua Chien, is both counterintuitive and profoundly insightful. Chien, who famously spotted Facebook’s potential when it was just a Harvard dorm project, isn’t just predicting the future—he’s dissecting the patterns that have shaped every major tech cycle. And what he’s saying should make us all rethink where the value in AI truly lies.
The Commoditization of AI: A Foregone Conclusion?
Chien argues that the AI model layer is already on the path to commoditization. Personally, I think this is where his cultural anthropologist lens shines. What many people don’t realize is that commoditization isn’t a death sentence—it’s a catalyst. In the PC, web, and mobile eras, infrastructure companies peaked early, but it was the applications built on top of them that captured the lion’s share of value. Netflix, Spotify, Uber—these weren’t selling the internet or smartphones; they were selling experiences.
If you take a step back and think about it, AI is no different. Google’s recent price cut for its AI subscription service is a telling sign. When giants like Google start slashing prices, it’s not just about competition—it’s about making AI a utility. And once something becomes a utility, the real money isn’t in selling the utility itself but in what you build with it.
Personalization: The Silent Killer App
One thing that immediately stands out is Chien’s emphasis on personalization. Hyper-personalization, he argues, is the through line that separates the next wave of winners. Why? Because it’s not about AI itself—it’s about what AI enables. Take MIDI Health, a women’s health company in his portfolio. By using AI to expand access to hormone replacement therapy, they’re solving a supply-constrained problem. What this really suggests is that AI’s value isn’t in its algorithms but in its ability to unlock human potential.
From my perspective, this is where the conversation gets exciting. AI isn’t just a tool; it’s a multiplier of human expertise. And when you apply that to industries like healthcare, entertainment, or even finance, the possibilities are staggering. But here’s the kicker: consumers won’t care that they’re using AI. They’ll care about the experience it delivers.
The Trust Gap: Why Super Apps Fail in the West
Chien’s take on Facebook’s failed attempts to build a super app is particularly illuminating. In my opinion, he’s spot-on about the trust gap between social entertainment and financial services. Americans, he argues, will never trust a single app with both their social lives and their finances. What makes this particularly fascinating is the psychological divide he highlights: financial transactions demand seriousness, while social media thrives on triviality.
This raises a deeper question: can any company bridge this gap? Personally, I’m skeptical. The expectations for security and reliability in finance are so high that blending it with the casualness of social media feels like trying to mix oil and water. It’s not just about technology—it’s about human psychology.
The Swing Back to Real-World Experiences
Here’s a detail that I find especially interesting: Chien’s bet on in-person connection as a counterreaction to digital overload. In a world where digital content is infinite, what becomes scarce—and therefore valuable—is real human contact. Companies like Bump and Fever, both in his portfolio, are capitalizing on this craving for real-world experiences.
What this really suggests is that AI isn’t just about virtual interactions; it can enhance physical ones too. Imagine AI knowing your preferences so well that it curates real-world experiences tailored just for you. That’s not science fiction—it’s happening now. And it’s a reminder that technology, at its best, should bring us closer to what makes us human.
The Future Isn’t AI—It’s What We Do With It
If there’s one takeaway from Chien’s insights, it’s this: the AI era won’t be defined by the companies selling AI models. It’ll be defined by the companies that use AI to create experiences, solve problems, and unlock new possibilities. In my opinion, this is the most exciting part of the AI revolution—not the technology itself, but the creativity it enables.
So, the next time someone asks you who the big winners of AI will be, don’t look at OpenAI or Google. Look at the companies that are using AI to reimagine industries, personalize experiences, and bridge the gap between the digital and physical worlds. Because, as Chien so brilliantly points out, that’s where the real value lies.
