According to a former AI researcher turned venture capitalist, there is a multi-year lag in the AI hype cycle.
Jenny Xiao, who co-founded Leonis Capital in 2021 after working at OpenAI, said the current investment excitement around AI lags far behind the actual research.
“There’s a huge disconnect between what researchers are seeing and what investors are seeing,” Hsiao said on a Fortune podcast this week.
What’s being discussed at the biggest AI conferences That’s three to five years later than what researchers thought, Hsiao said.
“We’re so far behind on the technological frontier that that’s the gap I really want to fill,” she added.
Mr. Xiao dropped out of his doctoral program. in Economics and AI, took a researcher role at OpenAI, and founded Leonis Capital to bridge the worlds of venture capital and deep academic AI research.
“We need a new generation of founders when it comes to AI. We need a new generation of VCs,” she says.
It is also the first time that investors need to be able to provide financial support for both markets and technology, he added. Unlike SaaS companies, which are built on a “stable technology stack,” AI is advancing rapidly. To keep up, Xiao said, investors will need to be as technologically savvy as founders.
If she had any advice for investors who aren’t deep into the technology side, it’s that they should know that “progress in AI is not linear,” she said.
It’s important to know that advances in AI will happen “in batches,” she says. Therefore, asking why advances in AI are slowing or accelerating is not the best way to characterize the speed of development.
“It’s neither of those extremes,” she says. “It’s somewhere in between.”
Leonis Capital did not immediately respond to Business Insider’s request for comment.
