a16z's Voice AI Investment Strategy

"Turpentine VC" | Venture Capital and Investing

This week on Turpentine VC, we are releasing an episode from The Cognitive Revolution, hosted by Nathan Labenz. Nathan sits down with Olivia Moore and Anish Acharya from Andreesen Horowitz to discuss the trends, investment strategies, and future potential of AI voice technology in both B2B and consumer sectors, exploring its implications for various industries including call centers, SMBs, and personalized AI companions.

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RECOMMENDED PODCAST:

🎙️ The Cognitive Revolution

The Cognitive Revolution is a podcast about AI where hosts Nathan Labenz and Erik Torenberg interview the builders on the edge of AI and explore the dramatic shift it will unlock over the next decades.

Spotify: https://open.spotify.com/show/6yHyok3M3BjqzR0VB5MSyk?si=7357ec31ac424043&nd=1&dlsi=060a53f1d7be47ad

Apple: https://podcasts.apple.com/us/podcast/the-cognitive-revolution-ai-builders-researchers-and/id1669813431

Youtube: https://www.youtube.com/@CognitiveRevolutionPodcast

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LINKS:

The Cognitive Revolution Website: https://www.cognitiverevolution.ai/

a16z Website: https://a16z.com/

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X / TWITTER:

@illscience

@omooretweets

@labenz

@TurpentineVC

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HIGHLIGHTS FROM THE EPISODE:

• Olivia Moore explains they track AI trends across platforms like Twitter, Instagram, TikTok, and YouTube, with YouTube being surprisingly important for AI tool adoption.
• They emphasize the importance of actually using AI products hands-on to build intuition about what works.
• Consumer demand signals (like people trying to make ChatGPT act as a therapist) help identify opportunities for standalone focused products.
• Anish highlights that voice is the original form of human communication but has been largely unaddressed by technology until now.
• Many voice AI startups gaining traction are B2B-focused, particularly for call centers and customer service.
• Current voice AI has largely solved basic latency and understandability issues, but still needs improvement in emotionality, interruption handling, and conversation flow.
• The most successful voice AI companies are specializing in specific verticals rather than offering generic solutions.
• Happy Robot (freight broker voice AI) demonstrates how AI can handle complex tasks like negotiation by introducing human-like elements such as "checking with a supervisor."
• AI voice agents typically disclose they are AI, but users quickly adapt to conversational patterns regardless.
• AI voice agents can offer advantages over human agents, including consistent friendliness, superhuman patience, and zero wait times.
• For SMBs, vertical-specific voice solutions are emerging for restaurants, spas, home services, and other industries.
• In the creator economy, tools like ElevenLabs offer voice cloning and creation, while platforms like Delphi enable interactive digital clones.
• For children, AI companions could serve as positive social models, tutors, and emotional supports.
• Companion AI usage has surprised investors, with more demand for "AI boyfriends" than "AI girlfriends" and usage resembling interactive fiction more than expected.
• Voice AI is expected to eventually become a modality feature on every product and device, serving as an "emotional bicycle" that extends our emotional capabilities.