Reviewing the opportunity for AI "pick and shovel" startups

In my last post, Investing in the Age of Generative AI, I presented a framework for investing in Generative AI startups. One thing I highlighted was the heightened VC interest in “picks and shovels” startups. These companies range from model fine-tuning, to observability, to AI “abstraction” (e.g. AI inference as a service). The bet here is that as startups and enterprises add AI to their product offerings, they might be unwilling or unable to build these capabilities in-house, and would prefer a buy vs. build approach.

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