Where Does Consumer AI Stand at the End of 2025?

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a16z

Business, Software Eating The World, Culture, Innovation, Disruption, Entrepreneurship, Science, Technology

4.2 • 1.2K Ratings

🗓️ 29 December 2025

⏱️ 44 minutes

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Summary

As 2025 comes to a close, consumer AI is entering a new phase. A small number of products now dominate everyday use, multimodal models have unlocked entirely new creative workflows, and the big labs have pushed aggressively into consumer experiences. At the same time, it is becoming clearer which ideas actually changed user behavior and which ones did not. In this episode, a16z consumer investors Anish Acharya, Olivia Moore, Justine Moore, and Bryan Kim look back at the biggest product and model shifts of 2025 and then look ahead to what 2026 may bring. They discuss why consumer AI appears to be trending toward winner-take-most, how subtle product design choices can matter more than raw model quality, and why templates, multimodality, and distribution are shaping the next wave of consumer products. Where do startups still have room to win? How will the role of the big labs continue to change? And what will it actually take for consumer AI apps to break out at scale in 2026?

Transcript

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0:00.0	For most of the year, less than 10% of chatchipt users even visited another one of the big LLM providers. When you open Gemini, it has a pop-up, says, we got a nanobanana. Would you like to do something with it? A little pain where you have to type something. Yeah. I don't know what to do. Yeah. Eat our product nuances that I think makes people actually take the first thing. The models have gotten to the level of quality that you can build a real scalable app on top of them.
0:26.0	And so the hope is 2026 will be a huge year for consumer builders.
0:31.1	As 2025 comes to a close, consumer AI is starting to look very different than it did at the beginning of the year.
0:37.4	A small number of products now dominate everyday usage.
0:40.8	New multimodal models have gone viral and the big labs have pushed harder than ever into
0:45.0	consumer experiences.
0:46.6	To take stock of the year, the A16Z team, Anisha Charya, Olivia Moore, Justine Moore, and
0:52.4	Brian Kim break down what actually worked in 2025 and what
0:55.9	didn't.
0:56.7	They discuss which model launches and interfaces change user behavior, why small product
1:01.3	details matter more than raw model quality, and whether the consumer AI market is trending
1:06.0	toward win or take most.
1:07.8	The conversation also looks ahead to 2026, where there is still room for startups,
1:12.4	how templates and multimodality are reshaping creation, and why this may finally be the moment
1:17.1	when scalable consumer AI apps break out. Today we're talking about who won consumer AI in 2025.
1:26.4	This was arguably the year that we saw the big model providers,
1:30.0	OpenAI and Google, most out of everyone, make a major push of their own into consumer,
1:35.2	both in terms of new models they release, but also in terms of new products, features, and
1:39.6	interfaces that target the mainstream user. You might wonder, why does it matter who is in the lead here?
1:45.0	There are some early signs that the general LLM assistant space
1:49.0	might be trending towards winner take all or at least winner take most.
1:54.0	So only 9% of consumers are paying for more than one out of the group of Chat ChippyT, Gemini, Claude, and Cursor. And for most of the
	...

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