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The AI startup market is expanding, from companies looking to develop new chips, to those using AI to build robots, to others looking to use AI to create niche solutions for industry-specific workflows. There are many potential areas in which venture capitalists can invest, but there are a few sub-sectors that they are more excited about than others.
TechCrunch recently conducted a survey 20 VCs investing in startups looking to sell their predictions to enterprises by 2025.
Mark Rostik, vice president and COO of Intel Capital, told TechCrunch that now that the big foundational models are in place — at least in his opinion — the next interesting area of investment is AI solutions for special tasks.
“I find models that excel at specific functions particularly interesting, especially when combined with agents built on top of them,” Rostik said. “As EU adoption accelerates, application-centric companies will take center stage, as CEOs increasingly look for ways to use AI in specific areas with tangible, transformative impact.”
This was voiced by Mike Hayes, managing director of Insight Partners. He added that he would seek support for companies making products that use artificial intelligence to reduce business friction.
“I look for solutions that solve unique, orthogonal problems for enterprises—areas where traditional solutions fail,” Hayes said. “This includes vertical and personality workflows reimagined with GenAI or agent automation and security innovations.
VCs interested in going after companies that target specific enterprise use cases need to make sure that these startup solutions are actually companies, not just features. Otherwise, we may see a repeat of the SaaS boom in 2021, when many companies with truly one-of-a-kind features have previously raised a lot of venture capital. stay behind In 2023, when enterprise budgets shrink, companies that offer platform solutions benefit.
Of course, there are tasks that are important enough to warrant a single-function solution. For SaaS, we’ve heard a lot that businesses will still pay for companies that offer custom cybersecurity solutions. It’s not yet clear what point solutions businesses will be willing to pay for AI. Ed Sim, founder and general partner of Boldstart Ventures, acknowledged the challenge.
“It’s about skating where the puck is going to be and thinking it’s a feature or a product or a business,” Sim said.
Another area that VCs are excited about is reliability and robustness. Jason Mendel, an investor at Battery Ventures, said he wants to invest in companies in the area of observability and reliability. Team8 co-founder and managing partner Liran Greenberg also focuses on what he calls “enterprise sustainability.”
“The Crowdstrike software update incident demonstrated how fragile our digital world is, not only because of cyber attackers, but also because of bugs,” Greenberg said. “We need digital infrastructure that is more robust by design, versus fragility.”
AI infrastructure will remain a hot investment area in 2025. VCs noted that with advances in AI agents, they are also exploring the infrastructure needed for businesses to adopt the technology, along with companies that can help determine pricing for AI agents. .
“There are still very early shots here, and I believe the momentum for AI infrastructure will continue through 2025, especially as agent frameworks proliferate, new model paradigms (including reasoning) evolve, advanced AI advances, and UI/UX development of AI applications (including computer use),” said Janelle Teng, vice president of Bessemer Venture Partners.
