AI productivity tools are overhyped and overfunded. Investors should look elsewhere

The world does not need any more AI productivity tools.

We’ve evaluated such tools running well into triple digits in the past 12 months alone, and believe that the vast majority of those are destined for the graveyard.

We’re in the most exponential cycle of innovation, and therefore value creation, the world has ever seen.

Not only has AI allowed for tremendous productivity increases, the rate of change is unprecedented.

It is both the most exciting, and amongst the hardest, times to be a venture investor.

The years 2023 and 2024 saw a mind-boggling rise in AI productivity tools.

Vibe coding became real with Lovable, lawyers harnessed Harvey, doctors slashed admin with the likes of Abridge and even the common office worker became far smarter with note taking assistants like Granola.

They all deliver as advertised: they search, they summarize, they automate, they save time and capture very useful context in the process.

They play across both the first and second phases of the AI development cycle.

The list of productivity tools, both horizontal and vertical, runs into the many hundreds today.

When we are on the precipice of discovering new drugs using in-silico AI modeling, AI Notetaker #25 is not only not needed, it is unlikely to survive as a standalone business.

Who survives Over 50 years ago, Charlie Munger convinced his best friend, Warren Buffett, to ditch the proverbial cheap cigar butts for buying durable, high-quality businesses, centered around their economic moat .

Ironically, today, these moats are the weakest they have ever been, specifically in AI-native businesses.

The pace of innovation that AI has brought about is unprecedented, as is the economic return.