Chi-Hua Chien saw Facebook coming — now he says the real AI winners won’t be selling AI

You keep coming back to personalization as a through line. Is that what separates the next wave of winners?

Hyper-personalization definitely is a key through line, because what does personalization give you? If done right, it gives you higher customer satisfaction, deeper engagement, and higher ARPUs over time.

We have entertainment companies in our portfolio — companies like Triumph and Ritten and Flow GPT — where the customer is not saying, “This is an AI application.” They’re saying it’s an entertainment application. These companies are going into 100 million, 400 million, 600 million of ARR very quickly, at great margins, because AI makes the experience more customizable and more personalized — but it’s not the fundamental capability they’re selling.

We also have a women’s health company called Midi Health. One of the fundamental constraints in women’s health is that there aren’t that many providers well trained in hormone replacement therapy for perimenopausal women. By using AI, they’re able to substantially expand the supply of care and treat hundreds of thousands of patients that otherwise couldn’t be reached. And they can do it cost effectively, which expands access to a market that was previously supply constrained. You can play that forward across every supply-constrained category where human expertise is the bottleneck.

How far away are we from AI that feels truly personal and ambient?

I don’t think we’re very far away at all. You can run locally now on your phone AI models that are as good as the best models were about six months ago — and that lag is shrinking. You go back two years ago, the lag between what you could run locally and what was in the cloud with the frontier models might have been 18 to 24 months. It’s now six months. It’s probably getting down to three months by this time next year.

What we don’t yet have is the use cases very well defined. You saw this in mobile — when the iPhone launched in 2007, people largely thought it was going to be all of the web applications ported over to mobile. It takes time for entrepreneurs to percolate around what is now possible.

What LLMs do, if you extrapolate away from how they work to what they do, is basically two things: They make it possible for you to process large amounts of context and make sense of it all, and they allow you to do personalization down to the individual, cost effectively, with a feedback loop that makes the product better and better over time.

You’ve watched Facebook try and fail for years to build a super app. Why is it so hard to blend financial services and social entertainment for American consumers?

They’ve taken multiple shots on goal — Facebook Credits, which launched in 2009 … Facebook Pay, Libra … They’ve never been able to realize a true super app. I think people have an intuitive perspective on trust, and there is a trust gap between entertainment and social products, and commerce, banking, financial services — particularly in the Western world.

There is a seriousness to financial transactions that is very different from the triviality of social media. And don’t get me wrong — that triviality has created a trillion-plus-dollar company. But financial services is actually the complete inverse: While audience has very high time and relatively low monetization, financial services transactions are very high monetization and relatively low time. You don’t want to hang out in your banking app. You want to transact and be done — but with extremely high confidence in the security and reliability of that transaction. That psychological expectation from customers is a very tough one to bridge.

Are you placing bets on people craving in-person connection as a counterreaction to all of this?

We really, really believe in this. What do people crave in a world where there’s an infinite supply of digital content? They crave the thing that is most constrained, which is real human contact, real-world experiences.

We have an investment in a company called Bump, based in Paris — from the original founders of Zenly, which was acquired by Snap … They’ve built an interface that allows people to interact in the physical world, catalyzed by digital information. We also have Fever, based in London and Madrid — essentially the Live Nation of Europe. They started with smaller, quirky events — candlelight concerts, the Bridgerton Experience — and have since gone mainstream.

I think we’re swinging back in the other direction from pure online consumption, and AI as enabling technology, knowing where you go, who you hang out with, where you tend to spend time, can extrapolate a ton of relevant interests that make that real-world experience more useful and more personal. That’s super exciting to us.