Here’s what happened. I’m not in the VC world but work closely advising big companies, there’s a lot of cross over between a Honeywell and a VC. I’m a traditional hardcore engineer so I’ve seen it from systems level (kernel, fs) to web, AI, etc. so I’ve seen it all but luckily more as a consultant/architect who could you know code. Cloud computing became big but was expensive. It had obvious benefits but for ignorance or timing people went from in house server racks to same thing on clouds. This id important upgrades are expensive for mission critical software. A lot of initiatives aka budgets paid developers to implement things that weren’t related to do that. SaaS came along. Now you didn’t have upgrades but you still needed to adjust the software. That’s mainly config based and junior or offshore labor can do that. AI appeared and people thought this awesome. They didn’t realize people were smashing into got until something built. Also the mindsets of companies didn’t change. They only hired SWEs to maintain Oracle, not improve business. They saw what ChatGPT could do by asking it questions and thought oh I didn’t know computers could do that. When generating code has been done forever it’s not that’s hard it’s knowing what needs to be solved. So you have older execs thinking AI will need a bunch of cheap labor creating software not realizing we’ve already made software creation almost stupid easy with HLL. A lot of good ideas don’t come from SV stereotypes but there’s a lot to be said who open source or otherwise contribute now not having SWSlE jobs.

Anyway every company stole the NLP/LLM/Rag model out of in chat bots got better results no need for ui budget (looking at you salesforce). Some tasks like call centers were pretty much also made for LLM. Other AI advances like sorting packages and treading the line between algorithm and AI do well.

More importantly big companies are making tons of money and there’s not been appreciable advances in technology. LLMs will be local and integrated it won’t be called AI. Workflows will improve etc. right now it comes from big tech with cash on hand it looks like big iron from the 80s. The internet didn’t see anyone control it and was relatively cheap to get into. Create a 3d image scanner that can process millions of say walnuts on an assembly line as good or bad isn’t sexy and niche… and expensive.

So we are in a lull companies are bringing dev in house and aren’t being experimental. Unless you have one of 7 big tech firms behind you won’t get looked at. So right now it is get to the state in b2b to just get bought.

Also b2c is controlled underneath by AWS or a big cloud provider.

Good thing companies are realizing they don’t need Google levels of high reliability. I see a real progression back to on prem with slimmed down K8S variants with Chromebook like devices. Google spent a lot making those “just work” as anyone installing even Ubuntu can tell you. But we are basically at the point someone will create a business like Steak deck with hardware compliance. Servers where apps can be deployed like VDIs and a resurgence away back to guy in his garage software development. It’ll still need VC funding but with secure infra you can have on prem SaaS catering to the mid market.