Where Value Will Accrue in AI: Martin Casado & Sarah Wang

a16z Podcast

a16z

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

4.4 • 1.1K Ratings

🗓️ 27 May 2025

⏱️ 22 minutes

🔗️ Recording | iTunes | RSS

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Summary

AI’s breakout moment is here - but where is the real value accruing, and what’s just hype? Recorded live at a16z’s annual LP Summit, General Partners Martin Casado and Sarah Wang join Erik Torenberg to unpack the current state of play in AI. From the myth of the GPT wrapper to the rapid rise of apps like Cursor, the conversation explores where defensibility is emerging, how platform shifts mirror (and diverge from) past tech cycles, and why the zero-sum mindset falls short in today’s AI landscape. They also dig into the innovator’s dilemma facing SaaS incumbents, the rise of brand moats, the surprising role of prosumer adoption, and what it takes to pick true category leaders in a market defined by both exponential growth - and accelerated wipeouts.

Transcript

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0:00.0	Zero-sum thinking has been wrong.
0:02.0	That doesn't mean that you can't get in trouble.
0:05.0	Every SaaS company under the sun has launched an AI product.
0:08.0	They're not just sitting on their hands.
0:10.0	And you'd think that they'd have a huge advantage given distribution.
0:13.0	But we're just seeing classic innovators dilemma.
0:16.0	GPG Rapper was this like derogatory term.
0:19.0	I think we'd come as a conclusion, like that's not even a thing. When someone writes software on the cloud, you don't call it a cloud wrapper.
0:24.6	The success of these companies actually also reflects, obviously the customer love,
0:30.6	but I would also add on top of that tangible value that they're bringing their customers.
0:35.6	Conflicts really matter in this space.
0:38.7	And so if you're too aggressive early and you don't really think through things, it can
0:42.5	really keep you from investing in the one that's winning it.
0:46.6	Recorded live at our annual LP Summit in Las Vegas, I sat down with general partners
0:51.2	Martine Casado and Sarah Wang for a deep dive on the current state of playing AI.
0:56.0	We covered where value is occurring across the stack, how this wave compares to past platform shifts,
1:02.0	and what it takes to build and invest in enduring companies in an era of exponential acceleration.
1:07.0	From the myth of the GPT wrapper to the rise of AI native apps and the unexpected lessons behind cursor's breakout growth, all with an eye toward where AI goes next.
1:18.6	Let's get into it.
1:21.6	As a reminder, the content here is for informational purposes only. Should not be taken as legal business, tax, or investment advice,
1:28.0	or be used to evaluate any investment or security, and is not directed at any investors or potential
1:32.8	investors in any A16Z fund. Please note that A16Z and its affiliates may also maintain investments
	...

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