Member-only story
As AI Hype Dies Down, Startups Built on AI Hype Are Imploding
Looking for funding for your AI startup? You might be too late
“This AI crap isn’t what it’s cracked up to be.”
That statement was uttered in total frustration by a serial entrepreneur friend of mine, as the answer to my question, “How is everything going with your AI startup?”
A few weeks ago, I wrote about his venture. He and two colleagues had founded a company that was imagined, built, and almost completely run using AI. The company experienced immediate success, but then it blew up, in a bad way.
The technical debt and unforced errors committed by their AI coding agents had been an issue from the beginning, but then about a month ago, their app stopped working in a way that — due to newly imposed usage limitations by their AI provider — they could not fix, or even try to fix, for hours.
That’s when I got involved, and my friend’s problem got fixed. Because ultimately, the problem was a surface problem, and one that could be fixed.
Three more AI startups came to me over the last few months, with problems that couldn’t be fixed. Their AI was working just fine, their companies had been successful, and revenue and investment dollars had already poured in.
