Breaking down the latest developments in AI with two experts — Jasper Masemann, investment partner at Cherry Ventures, and Lutz Finger, a visiting senior lecturer at Cornell University's SC Johnson College of Business and CEO and Co-founder of R2Decide.
In the past year, we've seen an influx of bots—from Meta’s celebrity avatars to Character AI’s digital personalities. The rush to dominate this space has been frantic, marked by high-profile acquisitions, public missteps, and a growing realization that not all bots are created equal. In this article, Jasper Masemann, investment partner, and Lutz Finger, venture partner at Cherry Ventures, argue that for bots to truly revolutionize our digital interactions, they must operate seamlessly across different platforms and applications, enhancing both workflow and entertainment experiences. Meta’s celebrity bots, touted as the next big thing in digital interaction, have struggled to meet expectations. Despite significant investment and the allure of celebrity names like Snoop Dogg, the novelty wore off fast when the bot couldn’t capture the essence of the person it was modeled after. On the other side of the spectrum, Character AI tapped into a growing demand for digital companionship. Character AI found success by offering bots that not only replicate famous figures but also create new, engaging personalities. However, this success also revealed a troubling reliance on AI for emotional support, particularly among those struggling with clinical depression, raising ethical questions about AI's role in mental health. What the bot is happening? The challenges faced by Meta and Character AI underscore a broader issue in the AI space: the delicate balance between realism and user comfort. The closer AI comes to mimicking human interaction, the more it risks crossing into the "uncanny valley," where the experience becomes unsettling rather than engaging. This is particularly problematic for entertainment bots, where the line between fascinating and creepy can make or break user engagement. Looking forward, the future of AI bots will likely hinge on two critical factors: personalization and conviction. Users don’t just want a tool that can perform tasks; they want a bot that understands them, anticipates their needs, and responds in a way that feels uniquely tailored to them. It might mean pulling back from hyper-realism and focusing instead on crafting experiences that are enjoyable without trying too hard to mimic human behavior. This is where bots like Meta’s Pi might have stumbled. Pi was designed to be the “friendliest AI,” but in trying too hard to be conversational and too friendly, it often failed to deliver the right answers efficiently. Users don’t just want a friendly chat—they want a bot that can make decisive, context-aware choices. The next step for AI chatbots The future of AI chatbots is also about breaking down silos. Jasper and Lutz believe that the bots of the future will be those that combine deep personalization and context-aware choices with the ability to operate across various platforms. Imagine a bot that can help you with your work tasks, keep you updated on your social feeds, and entertain you—all while maintaining a consistent, personalized interaction. This cross-platform capability is where the true potential of AI lies, and it’s the direction in which tech giants like Google, Meta, and Microsoft are moving. While functional bots serve practical purposes like setting timers, entertainment bots face greater challenges in maintaining user engagement over time. For bots to succeed, Jasper and Lutz argue that they must balance functionality with entertainment while navigating issues of authenticity and user expectation. As companies race to develop the next generation of bots, the focus must shift from merely replicating human interaction to creating experiences that are genuinely useful, engaging, and, above all, authentic.
AI Gold Rush: Is the Market Overheating? The AI industry, which has seen explosive growth and investment over recent years, is now entering a critical phase of maturation. Once dominated by a rush to build the necessary infrastructure for artificial intelligence (AI) technologies, the focus is increasingly shifting towards practical applications that deliver tangible business value. In this article, Jasper Masemann, investment partner, and Lutz Finger, venture partner at Cherry Ventures, discuss this shift and how to navigate the AI bubble. The tech industry is no stranger to bubbles fueled by excessive hype, such as the late 1990s internet boom and the current AI hype. Companies like Nvidia have seen massive stock price increases due to high demand for AI chips. Yet, there’s a disconnect between the market valuation and the practical applications of AI. The hype around generative AI, while significant, often outpaces the actual implementation and usability of the technology. This situation mirrors historical events like the gold rush, where heavy investments in tools were made with hopes of striking it rich, only to find that the actual availability of gold was uncertain. The rush to build AI infrastructure has led to a saturation point where additional investments in this layer are unlikely to generate significant value. The market now recognizes that AI's true value lies in practical business applications, where it can drive efficiency, innovation, and better decision-making. As investment in AI infrastructure slows, the focus rightly shifts to integrating AI into enterprise operations for transformative impact. This is where the next wave of investment should be directed. Navigating the AI Bubble The venture capital world is also adjusting. There’s been heavy investment in foundational models and AI research, but without clear revenue models, follow-on funding becomes challenging. As the AI market approaches bubble territory, it is crucial for startup founders to navigate this landscape wisely. Here are some strategies to consider: Focus on practical applications and value creation Now is the time for a shift from research to practical applications. Identify areas within your business where AI can solve real problems and create value. This involves understanding the specific needs of your clients and developing tailored and user-friendly AI solutions to address those needs. Develop a prudent business case There is a debate on whether further innovation is necessary or if the industry should focus on refining and applying the current capabilities of AI, such as integrating large language models into user-friendly applications. Avoid the hype surrounding AI infrastructure and concentrate on applications with clear, demonstrable benefits. Focus on applications that present a strong business case and a clear path to profitability. Your goal should be to make AI accessible and useful to the average user. Integrate AI into everyday workflows Embracing AI-native workflows is key to creating effective and seamless solutions. This requires a deep understanding of both AI technologies and the specific business domain. You should integrate AI into core processes to enhance efficiency and decision-making. For broader adoption, AI tools must be intuitive and fit seamlessly into existing workflows. For instance, artists and creators may be hesitant to adopt AI tools due to fears of losing control or compromising quality. Designing AI solutions that enhance rather than disrupt existing practices will be crucial for gaining user acceptance.
Welcome back to another episode of The Edge by Cherry Ventures where we discuss new, edgy topics about the future and AI. Live from London, today’s episode is a recap from the previous workshop at Station F, where they discussed building products with AI, and their most common challenges and mistakes. Building AI products requires a different approach than traditional software development. Unlike deterministic software, AI projects necessitate experimentation to determine the relevance and effectiveness of the AI used. Listeners are cautioned against the superficial integration of AI, such as adding generative AI to products where it doesn't add value. AI fit analysis is a tool used to evaluate whether AI is suitable for a specific product or problem. The analysis focuses on the quality and precision of data, and highlighting the inherent bias of data. Deciding the extent to which data should be de-biased is important, since sometimes biased data can be useful for achieving specific outcomes. When it comes to AI-based decision making, it is crucial to understand how and if AI can enhance the processes. For instance, in customer care, simple rule-based systems may suffice for straightforward queries, while complex, non-linear problems, like legal tech applications, benefit from AI's ability to handle numerous variables and provide more sophisticated solutions. Next, the conversation highlights real world use cases of AI. It is particularly valuable in things like handling complex decision-making processes with many variables. Some legal tech companies are using AI to analyze contracts, compare cases, and guide users through complex decisions. AI's ability to process and analyze large amounts of data quickly can significantly enhance such applications. In cybersecurity, AI can support infrastructure decisions by recognizing patterns and guiding users through changing scenarios. Industries such as social media monitoring benefit from continuously evolving AI models Scaling AI involves considering infrastructure costs, latency, and the overall benefits of scaling the system. The costs associated with using AI, such as query charges, must be justified by the benefits it provides, such as in healthcare applications where AI can enhance a doctor's efficiency and effectiveness. Open-source models like Lama reduce costs to hosting fees, making AI more accessible. However, achieving exponential scaling can serve as a competitive advantage.
For the first time ever, Lutz Finger, venture partner at Cherry Ventures, hosted a live founder coaching session for three pioneering startups looking to revolutionise neurological care with artificial intelligence (AI). Taking place at Cornell Tech, a graduate school and research center based in New York City, the session brought together three pre-seed stage startups for a unique coaching experience focusing on AI, data analytics, and entrepreneurship. Zenith, led by Shang, is developing an AI-first operating system to optimize treatment protocols and reduce costs, particularly in expensive therapeutic settings. Vince Hartman, co-founder and CEO of Abstractive Health, discussed solving physician burnout by creating real-time summary of patients’ medical records using AI. Neuralenz, presented by its founder Oybeck, focuses on non-invasive methods to measure brain health, potentially revolutionizing neurocritical care by avoiding invasive procedures. The founder coaching featured discussions on how advanced AI and data analytics are being integrated into new healthcare solutions, aiming to improve patient care and reduce costs. In this article, we outline three key tips for startups on their AI journey, using the experiences of these startups as actionable examples.
Podcast: The Edge by Cherry Ventures Episode: Season 2 Episode 3 Welcome back to another episode of The Edge by Cherry Ventures, a new seasonal podcast rebranding ourselves as we discuss new, edgy topics about the future and AI. We’re joined today by Lutz Finger and Jasper for a live and uncut conversation. To begin, Lutz and Jasper outline their approach to understanding AI, breaking it down into six key areas. They categorize AI's impact into two main types: evolutionary and revolutionary. Evolutionary AI improves existing workflows and everyday processes, while revolutionary AI introduces entirely new ways of doing things. Evolution begins with the concept of augmentation, where AI enhances daily tasks by simplifying repetitive workflows. Examples include using AI to automate booking processes, manage vacation requests, and streamline various administrative tasks. Though AI will replace some jobs, it will also create new opportunities and more efficient workflows. This shift necessitates adaptation and retraining for those affected. The value created by AI often benefits company owners and investors, highlighting the need for a fair distribution of these benefits. AI (specifically large language models) has the ability to make everyone smarter by improving information retrieval. While AI enhances information access, human oversight remains essential to ensure the accuracy and relevance of the retrieved data. The conversation then turns to potential business models that could emerge from AI evolution. One significant area is the replacement of traditional search engines like Google. Professions like auditing, tax advising, and engineering, where professionals occasionally need to reference large volumes of documents, can benefit greatly from AI's ability to quickly and accurately retrieve relevant information. Lutz and Jasper also highlight the complexities of ensuring data security and quality, particularly for large enterprises. Then, the conversation shifts to discuss the revolutionary potential of AI. First, future AI bots in providing personalized assistance and advice while acting as real sales consultants. AI could also streamline clunky, complicated interfaces by showing only the buttons and features relevant to the user’s current task, based on historical usage patterns and user personas. Ai-generated content is the next step for social media, too. Finally, new processing power could open up an entirely new suite of applications to improve decision making. Links: Learn more about Cherry Ventures: www.cherry.vc