Elad Gil on which AI markets have winners — and which are still wide open

Solo VC investor extraordinaire Elad Gil said onstage at TechCrunch Disrupt 2025 that AI has been one of the least predictable tech booms he’s ever seen.

Gil is on the cap table of virtually every hit company of the past decade, including many of today’s leading AI companies.

Still, he thinks that over the last year, certain AI markets appear to be nearly sewn up by market leaders. Beyond these areas, a vast swath of AI remains anyone’s game.

“I started investing in generative AI in 2021 … [A]t the time, not very many people were paying that much attention to it,” Gil said. But he had seen the massive leap in capability between GPT-2, launched in 2019, and GPT-3,  launched in 2021. “The step between 2 and 3 was so large that if you just extrapolated out the scaling laws, or the curve, then you could really assume that this was going to be incredibly important,” he said.

That convinced him to start backing early-stage startups building products powered by large language models. His bets included both foundational model makers like OpenAI and Mistral, as well as application companies like Perplexity, Harvey, Character.ai, Decagon, and Abridge. Yet throughout 2024 and much of 2025, the capabilities of foundational models leaped with every release, upending AI every few months.

“I used to say at the time that AI was the one market where the more I learn, the less I know. Usually, the more you learn about something, the better you know it, the easier you can predict the future, etc. But AI was just hazy. There’s just too much uncertainty. And I think there’s still markets like that in AI,” he said.

However, he’s also now seeing markets with clear winners. The most obvious example is with foundational models themselves. Even though hundreds of models exist, and some countries like South Korea are still working to develop sovereign models by local companies, leaders have emerged. “Google, Anthropic, OpenAI, maybe xAI, maybe Meta, maybe Mistral — it’s like a handful,” he predicts of the winners.

After models, he thinks AI-assisted coding has runaway winners that will make it hard for new entrants to catch up. Not only have the foundational model makers moved in (Anthropic with Claude Code, OpenAI with Codex) but also startup leaders like Anysphere’s Cursor and Cognition’s Devin (which acquired Windsurf) will be hard to beat. And there are well-funded startups like Magic (which Gil called a possible “outlier”) and Poolside on their tails.

He sees medical transcription as being cornered, with Abridge a front-runner and a handful of others like Ambience being “important.”

He names customer support — which was an early target of both traditional AI and the new crop of AI agent startups — as having hard-to-catch market leaders, such as his portfolio company Decagon. (It raised $131 million at a $1.5 billion valuation in June.) OpenAI chairman Bret Taylor’s startup, Sierra, competes in this space. This is also an area where the incumbents — Salesforce, HubSpot, and many others — are adding AI offerings.

So which markets seem wide open? Gil says financial tooling (fintech), accounting, AI security, and “other markets that we know are by default very interesting. We just don’t know who’s going to do it.”

Ironically, fast growth isn’t the signal it once was that a company is going to be a breakout hit. “The CEOs of every big company are basically telling their teams, hey, we have an edict. We need to figure out our AI strategy,” Gil said. “These giant enterprises are willing to try things that two years ago they never would have tried, and it’s only because of AI.”

So new AI markets can land a lot of revenue from big-name, enterprise customers quickly, “but that doesn’t mean they’re going to stick,” Gil points out.

It is only after a market goes through its trial-phase boom cycle that a startup and investors can see if this revenue will stay and grow. “There’s false signal, and then there’s stuff that is just working,” Gil said. He calls out legal AI startup Harvey as one of the market leaders that’s “just working.” It raised three massive rounds in 2025, leaping from a $3 billion valuation to $5 billion to $8 billion, in just a few months.