Andreessen Horowitz partnered with fintech company Mercury to release its inaugural AI Spending Report. This report reflects this new reality, showcasing artificial intelligence investments amongst startups for the shifting majority. The accompanying report is a testament to how these companies are leading the charge in a commercial market bursting with creative consumer stuff and enterprise junk. It further dives into the different AI tools that are quickly flooding the marketplace.
Seema Amble and Olivia Moore, the creative forces behind the report, highlighted Canva as an exceptional consumer app. They highlighted ways it has completely owned its space in the enterprise world. Canva took years to launch an enterprise plan as it focused on building its brand and recognition in the consumer space. This strategic move underscores the growing trend of startups opting for tools that cater to both individual users and larger organizations.
Loveable, even with more traffic than Replit, has attracted quite the opposite enterprise dollars. Startups are showing an unwillingness to spend big bucks on Lovable, mainly because it doesn’t have the enterprise features. Amble noticed that the space is moving quickly. He noted that today’s legacy players have become almost interchangeable with “what used to be 12 months ago.” The expansion of these kinds of tools into the sector tells us that the lines are blurring between consumer and enterprise use cases.
The omissions from the report highlighted that horizontal applications accounted for at least 60% of AI tools currently in use. It was vertical applications that made up 40%. The most popular vertical software companies are categorized into three primary areas: sales, recruiting, and customer service. This classification offers a glimpse into what startups are aiming to solve with their AI-focused funding.
In fact, Amble and Moore predict that the list of favored AI tools won’t even be the same two years from now. This transition will further illustrate the fast-evolving pace of the industry. Startups are increasingly adopting consumer-oriented tools such as CapCut and Midjourney, which are gaining popularity among organizations looking for innovative solutions.
The report further highlights the myriad of new note-taking applications capturing attention, like Otter.ai, Retell AI, and Habbyscribe. Despite this variety, no single option has so far seen any of these alternatives dominate this space.
Amble emphasized the efficiency that AI tools bring to various tasks, saying, “AI tools can do much more work, like outreach, faster than a human can.” Companies like Crosby Legal have begun leveraging AI to expedite legal contract reviews, minimizing the need for traditional meetings with in-house general counsel.
As startups explore these new tools, an important question looms over the industry: will consolidation occur within the AI space? Moore noted that he couldn’t say where AI platforms will be in six months or a year. Will there be one winner to rule them all, or a bushel of viable companies coexisting together?
“Does the space start to consolidate, and one place becomes the best platform to vibe code? Or is it the case where there’ll be four or five more vibe coding companies that are really big businesses for different types of applications? We don’t have the answer to that yet.” – Olivia Moore
Amble also noted that in the business-to-business space, companies are starting to adopt these delightful consumer tools. As such, the time is ripe for them to embrace consumer facing technologies. She stated, “We’re seeing that a lot of these companies are getting yanked into enterprise faster and faster because they make such delightful consumer tools that then people adopt and use as individuals and bring into their teams and workplaces.”
The report shines a light on the increased maturity of consumer-facing applications that were once frowned upon as successful, enterprise-ready solutions by the startup world. Moore explained that the total addressable market (TAM) for these tools is expanding: “Your TAM is no longer one or the other, but you can sell into both.”