What job to take if you best want to ride the generative AI wave over the next couple of decades. Serious question.
I'm currently a senior associate at a blue chip private equity firm where I focus on mature application software. In my free time, I've tried all of the new generative AI products, both playing with the consumer facing products, and creating simple apps with the developer platforms.
Some of the areas, like language models, have emerging winners that are typically in the Series C range, but beyond that the language model market is a bit crowded, so nobody can be certain who will best execute outside the emerging winners. Some of the areas like image are a bit earlier and do not yet have a breakout winner, so you only have the uncertainty about who will best execute. Other areas such as voice, video, music, RPA, and 3D assets are still nascent, with some Series A and B comparables, and some model development teams captive within the larger generative AI platforms.
In general - and completely putting aside the discussion of hype - there is high utility for each of these within the use cases and markets for which they are being developed. While each of these specific markets has a different size, there is more than enough opportunity to play for.
My question: if I were to move firms in about a year, I want to know the way that I can best play the generative AI wave. My initial hunch is to work at a Crossover fund that will give me high latitude to do my own deals, so that I can invest in as many of the foundational models as possible, as well as generative AI specific MLOps tools such as vector databases, which are also in the Series A-B range. Then, I can see value creation through the extended private period and into the public markets with a platform like this.
However, that is a tall order, because these are highly sought after funds, and I don't exactly have an edge right now to outcompete seasoned late stage VCs for high quality deals. My next thought is to simply join a public seat at a small HF once these firms are about to go public (there will be a better idea of how the market shakes out by then), and then lever the fuck out of long positions in these companies. If I bust because of poor security selection, then I'm an idiot who can't pick names and I bust, so be it. But if I am right, which I have deep conviction about the secular trend as a whole, then I crush it. To me, it feels like investing in cable in the early 80s.
I'm just wondering what you guys think is the best way to play this trend. I'm old enough to know that I want to put 75% of my chips in this basket, I just am not sure exactly how right now. Thanks for any thoughts.
I'll edit to add a yolo shoutout to APAE if the gods deign me lucky enough for a sagacious post of his.
You should be unhappy you're not the only one thinking this way.