Evidence receipt / belief
Published · transcript-backedBret Taylor: belief
31 Jul 2025 Lenny's Podcast He saved OpenAI, invented the “Like” button, and built Google Maps: Bret Taylor on the future of careers, coding, agents, and more
“All of the companies that were startups that tried to do this have already been consolidated or almost all of them, inflection, adapt, character and others. And I think there doesn't appear to be a viable business model for a startup because of the amount of CapEx required and there's just not enough fundraising runway to get to escape velocity.”
Source trail
Everything needed to verify it.
- Speaker
- Bret Taylor
- Attribution
- Verified speaker
- Claim type
- belief
- Recorded
- 31 Jul 2025
- Publisher
- Lenny's Podcast
Transcript context
…Got it. All right. Good tips. This is good for me to learn all these things as my kid ages. Okay, I'm going to zoom out and let's talk about business strategy AI. One of the biggest questions a lot of founders think about these days is just where should I build? What will foundational model companies not squash and do themselves? Being someone building a very successful AI business and also being on the board of OpenAI, feel like you have a really unique perspective on what is probably a good idea and it's probably not a good idea. How do you think the AI market is going to play out and where do you think founders should focus and also just try to avoid? I think there's three segments of the AI market that will end up fairly meaningful markets and then I'll end with how I think it's going to play out. So first is the frontier model market or foundation model market. I think this will end up the small handful of hyperscalers and really big labs just like the cloud infrastructure as a service market. And the reason for that is that creating a frontier model is entirely a function of CapEx. And you need a company with huge amounts of CapEx capacity to build one of these models. All of the companies that were startups that tried to do this have already been consolidated or almost all of them, inflection, adapt, character and others. And I think there doesn't appear to be a viable business model for a startup because of the amount of CapEx required and there's just not enough fundraising runway to get to escape velocity. And also, the models deteriorate in value fairly quickly as an asset class. And so, you need just a lot of scale to make a return on the investment for a model that deteriorates in value so quickly. So, I think that's going to end up probably no entrepreneur should build a frontier model. That's my take. Unless you're Elon.…
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