Elad Gil was already writing checks for artificial intelligence startups before the wider world even noticed ChatGPT.
Investment in firms like Perplexity and Character.AI came early for Gil, but his attention is now focused on something even bigger: transforming old-school organizations by weaving in artificial intelligence and then using the resulting efficiency to gobble up similar companies.
Instead of just investing in cutting-edge tech, Gil sees untapped promise in buying established, people-heavy fields such as law and professional services, then scaling them up through AI-fueled rollups. The logic is striking. Repetitive, language-based work is ripe for automation with this wave of technology, whether it is sales, coding, back-office support or content creation. Turn those manual tasks into software and you radically boost margins overnight.
Owning a business outright, Gil explains, lets you push transformation at full speed compared to merely selling software to others. The shift in profits is dramatic. A single business can jump from razor-thin returns to astonishingly high margins. With beefed-up cash flow, anyone following this playbook can outbid traditional buyers for more companies, creating a snowball effect.
He has already put his money behind two companies heading down this path. One is Enam Co., a productivity startup that is only a year old but already worth more than $300 million, thanks to high-profile backers.
The Next Phase of Artificial Intelligence Investment
Gil insists this isn’t like prior tech improvement efforts, where firms slapped on a bit of technology just to impress investors. He believes that AI truly lets you reconstruct a business’s cost structure, not just polish up its appearance.
Whether this rollup approach will pay off as handsomely as other bets Gil has made remains uncertain. He already has a golden track record with names like Airbnb, Coinbase, and Stripe.
Finding the ideal team for ambitious rollups is deceptively complex. The best entrepreneurs blend technology expertise and private equity instincts, a mix that rarely appears in a single founding team. Gil says he meets strong groups, but plenty are still finding their footing.
With more major players in Silicon Valley waking up to this strategy, Gil might see increased competition for rollups. To him, it is less about the financial windfall and more about his enthusiasm for emerging technology and for fostering progress alongside passionate builders.
When GPT-3 landed, Gil was already exploring next-generation models. His constant experimentation gives him a sharper view as the AI market finally starts to clarify after years of uncertainty.
In fields like law, healthcare, and customer support, Gil points to emerging leaders, many within his own portfolio. Harvey, which specializes in large language models for law, is reportedly seeking fresh funds at a massive valuation. healthcare automation company funding attracted a huge funding round this year led by Gil. Sierra AI, tackling customer service with smart agents, also claims sky-high valuations from launch.
It is still too early to declare the definitive winners, Gil cautions. Where there used to be dozens of contenders per niche, a handful now seem poised for the top spots.
For Gil, the real thrill is witnessing the collision between AI progress and traditional business reinvention. This is a period of rapid change, thick with new opportunities, and he seems determined to stay in the thick of it, as seen with venture capital automating mature businesses.
