elad gil on which ai markets have winners — and which are still wide open

AI Boom: An Unpredictable Trajectory, According to Elad Gil

Renowned solo venture capitalist Elad Gil, speaking at TechCrunch Disrupt 2025, characterized the current artificial intelligence surge as one of the most difficult-to-forecast technological advancements he has observed.

Gil’s investment portfolio encompasses a significant number of successful companies from the past decade, including numerous prominent players in the AI landscape.

Market Consolidation and Remaining Opportunities

Despite his extensive experience, Gil believes that certain segments of the AI market are rapidly becoming dominated by established leaders. However, a substantial portion of the AI field remains open for disruption and innovation.

“My initial investments in generative AI began in 2021,” Gil stated. “At that time, interest in the technology was relatively limited.” He was particularly struck by the substantial performance improvement between GPT-2, released in 2019, and GPT-3, launched in 2021. “The difference between these two iterations was so significant that extrapolating from the observed scaling trends suggested a potentially transformative impact,” he explained.

Early Investments and Rapid Evolution

This conviction led him to invest in early-stage companies leveraging large language models. His investments included both developers of foundational models, such as OpenAI and Mistral, and application-focused companies like Perplexity, Harvey, Character.ai, Decagon, and Abridge.

Throughout 2024 and into 2025, the capabilities of foundational models continued to advance rapidly with each new release, causing frequent shifts in the AI landscape.

The Uncertainty of AI

“I often found myself saying that the more I learned about AI, the less I understood,” Gil remarked. “Typically, increased knowledge leads to greater clarity and predictability. However, AI presented a uniquely complex and uncertain environment. This uncertainty persists in many areas of AI today.”

Emerging Market Leaders

Nevertheless, Gil is now identifying markets where clear frontrunners are emerging. Foundational models represent a prime example. While numerous models exist, and some nations are pursuing independent development, a select group of companies are establishing dominance.

“The leading contenders include Google, Anthropic, OpenAI, potentially xAI, perhaps Meta, and possibly Mistral – a relatively small number of organizations,” he predicted.

Runaway Winners in Specific Niches

Beyond foundational models, Gil believes AI-assisted coding is witnessing the rise of companies that will be difficult for newcomers to surpass. Both the foundational model developers, like Anthropic with Claude Code and OpenAI with Codex, and startups such as Anysphere’s Cursor and Cognition’s Devin (following its acquisition of Windsurf) are well-positioned. Well-funded companies like Magic and Poolside are also actively competing.

He also identifies medical transcription as a sector with a clear leader in Abridge, alongside other significant players like Ambience.

Competitive Landscape in Customer Support

Customer support, an early target for both traditional and new AI solutions, is also seeing the emergence of dominant companies. Gil’s portfolio company, Decagon, is a key player in this space. Sierra, founded by OpenAI chairman Bret Taylor, is another competitor, as are established companies like Salesforce and HubSpot, which are integrating AI into their offerings.

Wide-Open Markets

So, where are the opportunities for new entrants? Gil points to financial tooling (fintech), accounting, AI security, and “other areas that inherently present compelling opportunities, though the ultimate winners remain unclear.”

The Impact of Enterprise Adoption

Interestingly, rapid revenue growth is no longer a reliable indicator of long-term success. “CEOs across major corporations are now directing their teams to develop AI strategies,” Gil noted. “These large organizations are willing to experiment with solutions they would have dismissed just two years ago, driven by the potential of AI.”

This can lead to quick revenue gains from enterprise clients, “but it doesn’t guarantee sustained success,” Gil cautioned.

Distinguishing Signal from Noise

Only after a market undergoes a period of rapid growth can startups and investors determine whether that revenue will endure and expand. “There’s a distinction between genuine traction and fleeting hype,” Gil explained. He highlighted legal AI startup Harvey as an example of a company that is “genuinely succeeding,” having secured multiple substantial funding rounds in 2025, increasing its valuation from $3 billion to $5 billion and then to $8 billion in a matter of months.