It should be obvious that we’re currently in an AI “summer” of sorts. But underneath this sheen of euphoria, we are already seeing some early cracks in the market. In this post, I present a framework for investing in Generative AI startups and explore the following: • Why there’s such an intensity in the funding of AI startups, both in the context of the SaaS slowdown in the public markets and Sarah Tavel’s now ubiquitous “AI startups: Sell work, not software” blog post • The current weakness in the generative AI market • A framework for thinking about opportunities in Gen AI, highlighting why there’s a shrinking pool of opportunities, even this early in the cycle • The bifurcation in terms of fund strategies and the size of potential outcomes, using AI agents as examples • Strategies that funds might want to adopt given the lack of returns in most investment categories within Gen AI Would love to get thoughts & feedback from the community! Check it out here! https://eastwind.substack.com/p/investing-in-the-age-of-generative?r=5j48v