Introduction

Hey Fellas, Welcome Back.

Do you know what the image below is known as?

It's not a Normal Train; instead, it's a Hype Train. The same train millions of entrepreneurs, developers, and small-scale startups are riding today.

This Train is driven by AI Models. The Hype of AI.

Disclaimer: I am not an AI hater in any way. Instead, I too use AI many times in a day

And do you know where most of the passengers in the train will land?
(Spoiler: NOWHERE)

What do I mean?

Probably you have already heard some developers out there saying _ “Most AI startups will be dead in the next 2 years”.

Mostly, when I see such videos, blogs, etc, I ignore them myself because that's the internet, people always have different perspectives here.

While one content creator says GO is the GOAT, another one says GO is harder than you think.

And I do support both in such situations, as it can be hard for someone while easy for someone.

But actually, this time the situation isn't the same as it always used to be. This time, is it true when people are saying, 'Most AI startups will die in 2 years'?"

Let's take a look at this.

Selling Shovels in the Gold Rush

So during the actual Gold Rush (1849), very few people found gold and got rich. BUT the ones who made consistent money (More than those who found gold)? They were the smart cookies selling shovels, jeans, and tools to the gold diggers.

In AI right now:

• Gold Diggers = AI Startups

  • They’re trying to strike it rich by building AI apps, but most will fail due to competition, costs, or lack of demand.

-Shovel Sellers = AI Infrastructure Companies

• These are the companies providing essential tools:
• Cloud providers, GPU/chip makers, Model providers, Data/annotation services

They profit regardless of which startups succeed or fail.

Why Most AI Startups Will Die Soon:

Let me ask you a question: how many AI tools do you use daily?

Probably not more than ChatGPT.

And that's true, I can name you hundreds of AI I have tried, but mostly when I try them I am like "Oh, Cool, Awesome, Surprising" and then forget them after a while.

REASON: BECAUSE OTHER AI WERE SOLVING ANY PROBLEM?

I use ChatGPT to plan and get information, but as ChatGPT has a memory feature, sometimes I want the reply not to be related to any past chats, so I have to Deepseek. For coding, I mostly do it myself, or the GitHub Copilot helps me. For image generation, I use Grok.

Why do I use them? ChatGPT, Grok, Deepseek, and GitHub Copilot are solving real problems.

That is where most AI startups fail.
Most AI startups aren't selling a tool or solving a real issue; instead, they are selling a UI connected with an API.

Just imagine how many AI note-taking apps have been out to date, and how many do you use. To date, instead of AI for taking notes, I prefer Obsidian with Bit of ChatGPT.

Basically

The reasons AI startups will be dead soon are:

• High burn, low return

• Zero retention

• Hype fades

• Overcrowded Market & Lack of Differentiation

• Regulatory & Ethical Risks

• Dependence on Big Tech’s Infrastructure

• No Real Revenue or Business Model

Who Will Survive?

• Startups with real enterprise adoption (e.g., AI for healthcare, legal, finance).

• Vertical AI solutions (deep industry-specific applications, not just ChatGPT wrappers).

• Open-source & on-premise AI (avoiding dependency on big tech).

• Hardware & infrastructure players (like NVIDIA, but also new players in AI chips).

Credit

This blog is written with inspiration from THIS_BLOG.