January 2024 B2B AI Interest Index
We’ve updated our B2B AI Interest Index through January 2024:
While the “Atomic” > “Compound” still holds:
interest is at the “atomic” and “enabling” level (like Collaboration + Productivity) and not yet for “compound” applications (where multiple atomic AI features are aggregated to create a powerful, compound AI application).
the January 2024 data diverged from our earlier November 2023 and December 2023 reports.
Positive Divergence + Accelerating:
Our “blue chip” basket of large vendors - led by Microsoft Copilot - showed a meaningful acceleration in January.
While Microsoft Copilot growth is release-related - see Microsoft’s January 15th press release for more context - we view Copilot as the clearest source of B2B demand signal.
Interest at the Category level also showed an acceleration after a flat 2H 2023:
Underwhelming Trends:
High-intent searches for AI offerings of incumbent SaaS vendors (n = 339, same sample as our Demand Index) continue to be underwhelming - the slight increase over December is a product of seasonality:
High-intent searches for our basket of 50 Native AI apps also continue to be weak relative to booming AI demand narratives:
Early Stage AI + Software Investing Podcast Episode
VIDEO | AUDIO: Apple Podcasts | Spotify | All Platforms
Re-highlighting our recent episode with
from Earlybird Venture Capital, a European venture capital firm with 2 billion Euros assets under management (AUM), where he focuses on early-stage investing in B2B software and fintech. Akash also writes on Substack at .The majority of the episode is on AI (like whether AI’s capital intensity fits in the VC model) while covering implications for incumbent software (like lowering gross margins, lowering barriers to entry, and new pricing models).
Curated Content
A new AI market map from a16z’s Consumer team centered on productivity (much like our own “Atomic” definition above):
A take from Ali Ghodsi (CEO + Co-Founder of Databricks) on the advantages of Compound AI:
A bearish perspective from AI luminary Yann LeCun is worth flagging:
“AI Is Like Water” thesis from Morgan Beller at NFX
“We measured the ROI of AI in sales” - from Gong, citing 26% - 50% AI-led sales gains. (h/t Jon Russo)
Our Most Popular AI Posts
For our (many!) new readers, re-highlighting earlier AI posts: