Venture capitalist Chi-Hua Chien, co-founder of Goodwater Capital, is drawing a clear line through the next phase of artificial intelligence: the most valuable companies may be the ones that use AI to improve products, not the ones that sell the models themselves.
Chien, who was an early investor in Facebook during his time at Accel, says the AI market is moving quickly toward commoditization at the model layer. In his view, the real opportunity is shifting to applications that turn AI into more personal, more useful, and more engaging experiences across entertainment, health, and everyday services.
He points to a familiar pattern from earlier technology cycles. In his reading, infrastructure often gets standardized over time, while applications capture the larger share of long-term value. That dynamic, he argues, is already visible in AI as companies compete on distribution, pricing, and product design rather than model access alone.
Chien also sees hyper-personalization as a defining feature of the next wave. AI, he says, can help products adapt to individual users, deepen engagement, and improve customer satisfaction. He highlights consumer-facing companies that are using AI behind the scenes to power entertainment and wellness experiences without presenting themselves as pure AI products.
In healthcare, he believes AI can expand access where specialist capacity is limited. By helping providers scale expertise more efficiently, AI can support broader reach in areas such as women's health and other supply-constrained services.
Looking ahead, Chien says locally run AI models are closing the gap with frontier systems at a rapid pace. That shift could make AI feel increasingly ambient and personal on phones and other devices, even as entrepreneurs continue to define the most compelling use cases.
His broader thesis is that the next era of AI will be shaped less by model ownership and more by how intelligently technology is woven into daily life. That could set the stage for a more personalized digital future.