Vertical AI and who could build it
Wwelcome to TechCrunch Exchange, a weekly newsletter about startups and markets. It is inspired by the TechCrunch+ daily column from which it takes its name. Want it in your inbox every Saturday? Register here.
It was a short work week in the US, but there was a lot to read and ponder. For you today, some thoughts on the future of vertical SaaS, what the second half of 2023 could hold for Israeli startups, and the well-being of founders. — Anne
Vertical AI is the next logical iteration of vertical SaaS, Index Ventures partner Paris Heymann recently told TechCrunch+. In other words, just as companies used to buy cloud-based software designed for their industry, they will now buy AI applications that leverage basic models and infrastructure to meet their business needs.
While some commercial AI applications will certainly be horizontal, “meaning they can be used by customers in any industry,” Heymann predicted that many AI applications will also be vertical or industry-oriented.
Horizontal and vertical applications can make businesses more efficient. But according to Heymann, “AI-enhanced software applications will be more powerful when they have deep underlying knowledge of end-user workflows and access to valuable industry-specific training data.”< /p>
I tend to agree with Heymann's point of view, and some of the examples he mentioned are proof that the demand is already there for vertical AI. For example, international law firm Allen & Overy recently announced a partnership with Harvey, a startup backed by the OpenAI Startup Fund that puts AI and LLMs to work in the legal field.
"It's a game-changer that can unleash the power of generative AI to transform the legal industry," said an A&O executive.
Wwelcome to TechCrunch Exchange, a weekly newsletter about startups and markets. It is inspired by the TechCrunch+ daily column from which it takes its name. Want it in your inbox every Saturday? Register here.
It was a short work week in the US, but there was a lot to read and ponder. For you today, some thoughts on the future of vertical SaaS, what the second half of 2023 could hold for Israeli startups, and the well-being of founders. — Anne
Vertical AI is the next logical iteration of vertical SaaS, Index Ventures partner Paris Heymann recently told TechCrunch+. In other words, just as companies used to buy cloud-based software designed for their industry, they will now buy AI applications that leverage basic models and infrastructure to meet their business needs.
While some commercial AI applications will certainly be horizontal, “meaning they can be used by customers in any industry,” Heymann predicted that many AI applications will also be vertical or industry-oriented.
Horizontal and vertical applications can make businesses more efficient. But according to Heymann, “AI-enhanced software applications will be more powerful when they have deep underlying knowledge of end-user workflows and access to valuable industry-specific training data.”< /p>
I tend to agree with Heymann's point of view, and some of the examples he mentioned are proof that the demand is already there for vertical AI. For example, international law firm Allen & Overy recently announced a partnership with Harvey, a startup backed by the OpenAI Startup Fund that puts AI and LLMs to work in the legal field.
"It's a game-changer that can unleash the power of generative AI to transform the legal industry," said an A&O executive.
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