![High contrast grainy photo of a hand picking up one of several human figurines](https://media.wired.com/photos/68fc00a1582abcd215b5b4af/master/w_2560%2Cc_limit/WIRED-AI-as_Startup_Blue.jpg)

*Photo-illustration: WIRED Staff; Getty Images*

## The AI Startup Explosion

Earth is said to be home to more than **10,000 AI startups**—they're more abundant than cheetahs and outnumber dawn redwoods. While this figure is an estimate due to the constant flux of startups emerging and disappearing, the trend is undeniable. Last year alone, **more than 2,000 AI startups received their first round of funding**, highlighting the massive influx of capital into this sector.

## What Are These Startups Actually Doing?

As investors pour billions into artificial intelligence, a critical question arises: What are all these companies in the AI boom actually accomplishing? The landscape is filled with entrepreneurs attempting to **rebuild the economy around AI**, but the practical execution and impact remain areas of intense exploration and scrutiny.

Thousands of entrepreneurs are trying to rebuild the economy around AI. I set out to see how they’re actually doing it.

Inside the AI Startup Boom: How Thousands Are Building the Future and Embracing Risk

## Launching New Seed and Venture Funds for Legendary Companies

We are thrilled to announce the launch of our latest **venture fund** and our **sixth dedicated seed fund**, designed to partner with the next generation of **outlier founders** from day one.

There's something magical about forming partnerships in the earliest stages and watching them evolve. Initial ideas grow into legendary companies—from **Apple** to **Nvidia** to **Stripe** to **Wiz**. This fuels our excitement for the future. Today, founders face a **once-in-a-generation opportunity** as **AI** is set to reimagine every industry. We stand at the brink of a foundational platform shift as transformative as the rise of the internet. While tech supercycles bring both euphoria and disillusionment, looking back thirty years from now, we'll see **generational companies** that have reshaped our world in unimaginable ways.

We seek founders from any background worldwide who see possibility where others see limits, armed with the **unshakable grit** to turn impossibility into reality. As we launch our latest funds, our Early team shares emerging themes that excite them about the opportunities ahead.

### Emerging Themes from Sequoia's Early Team

**Lauren Reeder**

Video and image models have advanced significantly in character consistency, crisp editing, and photorealism. This **step change** will enable a host of new applications, especially in **consumer apps**. We connect better and are more engaged by videos and images than text, paving the way for a new category of companies built on these models.

I'm also excited about the evolving **infrastructure layer** of the software development stack. With **LLMs** at the core, building applications has changed dramatically. As the app layer matures, new infrastructure primitives are needed for the next generation of applications.

**Bogomil Balkansky**

**Security** and **observability** are huge domains needing solutions. LLMs can't solve these problems off the shelf due to a lack of public training data. Since LLMs alone aren't enough, these fields are ripe for innovation with other forms of **AI**.

**Josephine Chen**

We're on the cusp of a new world of **consumer apps**. Platform shifts open new dimensions in how people live. **Stablecoins** will change how consumers interact with financial services. **Healthcare** will transform as people use LLMs to take control of their health. Step function changes in **voice**, **video**, and **robotics** will fundamentally shift how people interact with technology and each other.

![Sequoia Capital Team](https://sequoiacap.com/wp-content/uploads/sites/6/2025/10/1-copy.jpg?w=1024)

**Luciana Lixandru**

I'm excited to meet founders using **Europe** as their product and engineering hub to take over the world. Europe's founder pool has never been stronger, with repeat entrepreneurs and alumni from breakout scaleups bringing hard-won judgment, world-class product taste, and global scaling experience.

**Dean Meyer**

**Network security** is undergoing a fundamental reset. The network is evolving with more distributed users, applications, and edge devices. AI accelerates this shift, multiplying request volumes. The next generation of network security will likely be **identity-driven**, built around users, devices, and AI agent permissions.

As more data centers come online, **data center security** becomes critical. AI workloads concentrate in specialized hardware, turning infrastructure into a new attack surface. Securing the new compute layer is essential.

**Konstantine Buhler**

**E-commerce** is ripe for reinvention with AI. There's a huge opportunity in **usage revenue**, where AI agents get paid for tasks, and new monetization for in-app purchases. OpenAI's service for research and buying products in chat apps is just the start. We see a **multi-trillion dollar opportunity for commerce in AI** and hope to back the next Amazon for the AI era.

2025 was the year **voice AI** went mainstream, but many industries, like financial services where 92% of fixed income is traded over the phone, still need solutions.

![AI and Commerce](https://sequoiacap.com/wp-content/uploads/sites/6/2025/10/3-copy.jpg?w=1024)

**George Robson**

I see potential in providing **digital asset solutions** to regulated financial institutions. Cryptocurrencies have been peripheral, but new regulations in the US and Europe allow institutions to buy and sell them. There's a mismatch between crypto expertise and that of large banks, creating opportunities for early-stage companies to bridge the gap.

Most **medical data** isn't used to accurately package and price products. For example, the UK has longitudinal electronic data since the 1980s, but it's underutilized for pricing medication, life insurance, etc. We're excited for teams tackling these problems.

**Alfred Lin**

Almost every industry will be disrupted by **AI**. History shows that technology waves like internet, mobile, and cloud brought business model transformations; AI will do the same. While AI has automated mundane work, we look forward to new creative ideas, business processes, consumer experiences, and ways to play that can be truly transformative.

**Shaun Maguire**

**Silicon photonics** has been a holy grail for decades and is finally happening as use cases explode. The bottleneck in AI is multiplying big matrices, which silicon photonics can do efficiently. Its impact in the next 50 years could rival silicon electronics in the last 50.

I'm also interested in partnering with founders in **Israel**. The tech ecosystem has matured, with Wiz being just the beginning. I like backing underestimated people, and the entire Israeli ecosystem is underestimated now.

![Innovation Hub](https://sequoiacap.com/wp-content/uploads/sites/6/2025/10/2-copy.jpg?w=1024)

**Charlie Curnin**

**Having fun** might be the most underrated use case for AI. Ten years ago, entertainment came from others making content; today, we make our own. From Suno to Sora, AI enables more creativity, delight, and participation in making, remixing, sharing, and consuming.

**Julien Bek**

The **physical world** represents 80% of global GDP. Companies winning in **physical AI** will become some of the largest globally. We're entering a **hardware renaissance** and excited to partner with pioneers in this new supercycle.

I'm also interested in **AI Forward Deployed Engineers**. For every $1 spent on software, up to $6 are spent on services. The services industry needs more human workers to deploy AI in production—a $500B growing labor market constrained by supply. AI can help humans be more productive, starting as co-pilots and evolving to autopilots.

**Stephanie Zhan**

As AI becomes **superintelligent**, it automates services and advances possibilities in every field, from coding to physical AI. Imagine AI transforming every industry: consumer, engineering, product, security, sales, marketing, finance, legal, medicine, education, manufacturing. We're living through the most exciting time in history.

**Roelof Botha**

I'm drawn to **dynamo founders**—polymaths with a voracious appetite for learning, blending interdisciplinary insights. They don't follow conventional paths; they're defiant and chart their own course. With today's AI tools, such founders can address problems in ways never before possible.

We are excited to launch our latest venture fund and our sixth dedicated seed fund to continue partnering with the next generation of outlier founders at the start of their journey.

Sequoia Capital's Vision: Backing the Next Generation of AI-Powered Unicorns

## A Finance Veteran's Urgent Message to Gen Z

Quentin Nason, a seasoned finance expert with 35 years in the City of London, is sounding the alarm for **Gen Z**. He advises young people to **"think big"** and pivot towards **entrepreneurship** as traditional entry-level roles become scarce due to **AI and automation**.

![Tourists view Canary Wharf's financial district across the River Thames at Greenwich in London on May 10, 2025.](https://i.insider.com/68f9f75e599d46a4ccc0b153?width=700)

*Caption: A City veteran warns Gen Z to stop chasing shrinking graduate jobs and start building their own businesses as AI reshapes work. (Credit: Mike Kemp/In Pictures via Getty Images)*

Nason highlights that the rapid advancement of **technology** is fundamentally altering career landscapes, making it crucial for the younger generation to **create their own opportunities** rather than relying on dwindling corporate positions. This shift not only fosters innovation but also builds resilience in an unpredictable job market.

By encouraging **startup ventures** and **self-employment**, he emphasizes that Gen Z can leverage their digital nativity to thrive. This approach aligns with broader trends in the **economy**, where agility and creativity are becoming key drivers of success.

City of London veteran Quentin Nason says Gen Z should "think big" and turn to entrepreneurship as AI and automation shrink entry-level career paths.

Why Gen Z Must Embrace Entrepreneurship Now as AI Wipes Out Entry-Level Jobs

Serial entrepreneur Nicole Bernard Dawes seemed destined to build million-dollar food brands. As a kid, she grew up working the counter of her mother’s health-food store and roaming the floors of her father’s burgeoning snack empire, **Cape Cod chips**. She would eventually follow in their footsteps as a founder, but Dawes’ first job was a management consultant for food and beverage clients. It was a short-lived career that Dawes tells *Fortune* she didn’t enjoy. Then, in what felt like perfect timing, she was pulled back to Cape Cod chips when her dad, the late Steve Bernard, bought back his $4.87 billion business from Anheuser-Busch in 1996.

“I left the consulting firm to go work with him when he bought Cape Cod chips back. So it just kind of all timed out,” Dawes says. “But I’m glad I did [consulting], because it was really a wonderful experience to work for somebody that I wasn’t related to, have a real boss, and have co-workers that I wasn’t related to.”

Dawes quickly took on a role in advertising, serving as Cape Cod chips’ director of marketing.

“In hindsight, it was a weird situation, because I was actually the head of marketing who reported to the president, who wasn’t my dad,” Dawes explains. “There really wasn’t time for worrying about anything but getting this brand back.”

Anheuser had divested almost “overnight,” Dawes recalls, and the iconic brand lost all its manufacturers, distributors, and retailers in one fell swoop. Everyone’s focus was suddenly poured into turning things around. Four years later—after Dawes introduced ideas like **reduced-fat chips**, which went on to become a best-seller—her father sold his company a second time to snack food company Lance. Dawes saw this as her moment to strike out on her own.

“I had realized that this was my chance to create the company that I’ve been envisioning in my head since I was a little kid on my mom’s natural food store counter,” she says. “I’m not my father. That was his dream and his company, and it was a little bit of what I wanted, but it wasn’t exactly.”

## Leaving Cape Cod chips to found Late July and Nixie

In 2003, Dawes launched **Late July**, an organic, non-GMO tortilla chip brand that’s now stocked in major grocery chains across the country, including Target, Whole Foods, Kroger, and Walmart. What started as a kitchen-counter operation grew into more than a **$100-million business**. Campbell’s acquired a majority stake in 2014, and eventually bought the rest of the company in 2017.

After more than two decades of working in the food space—reviving her family’s snack empire, and building her own chip brand from scratch—Dawes was ready to move on from starch. This time, she looked at beverages. Walking down the grocery store’s refrigerated sections, Dawes noticed racks lined with Sprite, Coke, and Dr. Pepper—but few healthy options. That observation sparked her next venture: **Nixie**, a zero-sugar, sustainably packaged soda line offering flavors from cola and root beer to ginger ale and cream soda.

Investors have taken notice. Nixie raised nearly **$27 million** in new funding earlier this year, and its products are already sold in over **11,000** major grocers like Whole Foods, Sprouts, Safeway, and Ralph’s—as well as on Amazon and Instacart. Her second business success into healthy food and beverages has made Dawes a leading innovator in the **CPG arena**. It’s just one step forward in her goal as an entrepreneur to make sure all of her guilty pleasure treats are keeping up with the times.

“My entire career has been built around fixing broken parts of the food business,” Dawes says, recognizing how the soda industry still has a lot of catching up to do. “I’m thinking, how has [the beverage] aisle managed to escape, while every other part of the grocery store has improved and become healthier and become more sustainable?”

Serial entrepreneur Nicole Bernard Dawes scaled her own multimillion-dollar brands, Late July and Nixie, after getting Cape Cod chips back on track: “I'm not my father. That was his dream and his company.”

From Family Legacy to $100M Empire: How Nicole Bernard Dawes Reinvented the Snack Industry

## Essential Reading for Aspiring Entrepreneurs

Whether you're launching your first business or still dreaming about it, the right books can set you up for success. Here are **7 of the best business books** that all new and aspiring entrepreneurs should read:

### 1. The Lean Startup by Eric Ries
Learn how to build a sustainable business by focusing on **validated learning**, **rapid experimentation**, and **iterative product releases**.

### 2. Zero to One by Peter Thiel
Discover how to build **monopoly businesses** that create new markets instead of competing in existing ones.

### 3. The Hard Thing About Hard Things by Ben Horowitz
Get real-world advice on managing the **toughest problems** that entrepreneurs face when building a company.

### 4. The $100 Startup by Chris Guillebeau
Find inspiration from case studies of entrepreneurs who built successful businesses with **minimal investment**.

### 5. Start with Why by Simon Sinek
Understand the power of **purpose-driven leadership** and how it can inspire customers and employees alike.

### 6. The E-Myth Revisited by Michael E. Gerber
Learn why most small businesses fail and how to **systematize your operations** for scalable growth.

### 7. Thinking, Fast and Slow by Daniel Kahneman
Gain insights into **decision-making psychology** and how cognitive biases affect business choices.

These books cover everything from **idea validation** and **funding strategies** to **team building** and **scaling operations**. They provide practical frameworks, real-world examples, and timeless principles that can help any entrepreneur navigate the challenges of starting and growing a business.

Reading these books will give you a solid foundation in **entrepreneurial thinking**, help you avoid common pitfalls, and equip you with the knowledge to turn your business ideas into reality.

Whether launching your biz or still dreaming about it, these books set you up for success.

Inside the AI Startup Boom: How Thousands Are Building the Future and Embracing Risk

Summary:

The AI Startup Explosion

What Are These Startups Actually Doing?

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Other Latest News

Sequoia Capital's Vision: Backing the Next Generation of AI-Powered Unicorns

Why Gen Z Must Embrace Entrepreneurship Now as AI Wipes Out Entry-Level Jobs

From Family Legacy to $100M Empire: How Nicole Bernard Dawes Reinvented the Snack Industry

Unlock Your Entrepreneurial Potential: 7 Must-Read Books for Startup Success

Other Latest News

Sequoia Capital's Vision: Backing the Next Generation of AI-Powered Unicorns

Why Gen Z Must Embrace Entrepreneurship Now as AI Wipes Out Entry-Level Jobs

From Family Legacy to $100M Empire: How Nicole Bernard Dawes Reinvented the Snack Industry

Unlock Your Entrepreneurial Potential: 7 Must-Read Books for Startup Success